Billion-dollar buy — Victoria Mutual Wealth Management acquires the Towers

BY AVIA COLLINDER Business reporter

Tuesday, February 14, 2017

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Informed sources indicated on Monday that a price of just over $1 billion was paid by Victoria Mutual Wealth Management (VM Wealth) — a subsidiary of the Victoria Mutual Building Society (VMBS) — for the acquisition of the Towers building in New Kingston.

The purchase was announced by VM Wealth on Monday, February 13.

The acquisition was the first purchase by the investment firm through its new property fundm which forms part of its unit trust offering.

Real estate sources said the seller is Cable and Wireless Pension Fund, which first placed it on the market in 2008 and then decided to wait out the financial downturn.

The Towers, sitting on close to two acres of land and with more than112,000 square feet of office space at 25 Dominica Drive in New Kingston, is now owned by Victoria Mutual Wealth Management Unit Trust Property Fund.

VM Wealth indicates that the Towers will continue to house 39 existing tenants and serve as a rental unit for business organisations. A change in the building’s name, however, is being planned.

Wihcon Properties Limited, which manages a section of the property, is currently advertising available space online at US$7.50 - US$8.75 per square foot per annum, plus maintenance at US$14.63/ sq. ft p.a. (+ GCT).

Rezworth Burchenson, deputy chief executive officer, Victoria Mutual Wealth Management, who spearheaded the building’s acquisition, said the purchase will add value to the portfolio.

"We launched our Unit Trust in September 2016, and our equity portfolio was the best-performing equity fund in Jamaica with a return of 16 per cent up to December 2016. We have now moved to offering our clients the option to invest in real estate with the introduction of our property fund," he said in the release announcing the acquisition.

Burchenson added, "Our calculations have indicated that real estate is one of the better-performing asset classes over the long term, and this portfolio allows investors a vehicle to participate in that growth. We anticipate great returns from our purchase of the Towers — that of over 10 per cent per annum in the long term."

Burchenson said that 100 per cent of the capital appreciation and rental income from the Towers will be for its unit trust holders. He noted, "We are in the process of finalising major efforts to build out this portfolio, while allowing some diversification into other segments of the real estate market."

Victoria Mutual Wealth Management recorded $310.98 million in profit after tax as at December 2015 — an increase of 31.35 per cent over the 2014 financial year.




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