US$20-m property grab

Proven REIT targets at least 3 acquisitions in 2014

BY SHAMILLE SCOTT Business reporter scotts@jamaicaobserver.com

Wednesday, January 22, 2014





PROVEN REIT is aiming to acquire US$20 million worth of properties this year.



Locally, the company has already spent US$1 million (J$106 million) to acquire the land, pay for consultation and professional fees for its debut real estate, and will spend another $200 million to build the apartment complex that will feature 31 units on Kingsway that is to break ground next month.



It’s also in the preliminary stages of striking a deal to acquire two more properties — one similar to Kingsway and office space it would build for a major conglomerate.



What’s more, the REIT is close to chosing its first offshore investment — a property in the Cayman Islands — which signals Proven’s shift towards the region and which reflects diversification of its real estate assets.



Winston Hepburn, the executive chairman of Proven REIT, said the company evaluated about half-a-dozen properties in Cayman and has narrowed the choice down to three — two that are primarily commercial properties and one that includes residential units.



All three are at least 80 per cent tenanted and are located within the prime tourist area of Cayman, according to Hepburn.



"PIL’s chairman Hugh Hart lives in the Cayman Islands so we have been on the ground with the guidance of Mr Hart who has also personally invested in real estate there," said Christopher Williams, president of Proven Management Limited (PML).



"So he’s like a Godfather guiding our exploits there and Winston knows a lot of individuals in the real estate sector there." PML is the investment manager for Proven Investments Limited (PIL) and its assets, including an 85 per cent stake in Proven REIT.



Proven is building out a solid real estate portfolio and it wants to emphasise that it’s a regional entity, according to Williams. To do so, the company hired Hepburn to head REIT.



"Part of this requires not only the cash, but the experience to spot opportunities and execute them, and there is no question that Winston is one of the most experienced individuals in this space," said Williams. Regional assets are attracting significant value and Proven wants to be a part of it, he added.



"In some countries, probably not as aggressively as in Jamaica, the real estate assets have garnered significant value and the value proposition has stood up to the recession," he said. "It has attracted the most global investment in real estate."



The strategy is to grow Proven REIT, to attract global investors and list on a major stock exchange, locally or abroad, within three to four years.



Proven REIT partnered with Matalon Homes to develop the homes at Kingsway over a 12-month period.



"It’s a Spanish design with a tropical flavour, it’s very modern, the price will vary between $12 and $15 million and the target is middle-income young professionals who are investing for the first time," Hepburn said. "We are hellbent on protecting the Proven brand."

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