Construction work at a combined residential and tourism development is due to start in the new year.

All 15 of the apartments at the former Palm Reef hotel in Paget have been sold at around $1 million each.

The homes are expected to be completed by November next year as the development moves into top gear.

And as workmen move in, it is expected that construction will also be underway at two other Island tourism projects, the Palmetto Gardens Hotel in Smith's Parish and Daniel's Head eco-resort in Sandys Parish.

Following completion of the residential part of the Palm Reef project, work will then start on the second phase of the Harbour Road site -- the 21 executive hotel suites.

That part of the development is due to be open by Spring 2001.

Ian Gordon, of Entasis Architecture, said demolition of former Palm Reef buildings was now complete and building work on the eastern section would begin shortly.

The project, backed by local company The Wharf Ltd, is the first tangible sign of new tourism development for many years. It replaces the original Palm Reef hotel which closed in 1997.

The news follows the approval of plans for two swimming pools, the suites and other parts of the scheme.

And the permission came after a rival plan, by Beam Ltd, was turned down by the Development Applications Board in May.

The existing Palmetto Hotel is due to close at the beginning of December, as an $18 million renovation project transforms the site into a hotel, spa and residential facility. It is due to re-open in 2001.

And pre-construction work is imminent at the West End as the new eco-tents take shape on the former Canadian base. The development is expected to be ready in time for the 2000 tourism season.