Developers of Fairmont Estates, billed as a collection of swanky residences in Irwin, St James, are banking on new partners and tighter financial controls to successfully complete the project.

“We’re finalising funding and partnerships to restart the project. Our goal is to resume phase one in January 2025. Staged handovers are scheduled to begin in early 2026,” Martin Addington, who leads Global Precast Homes Limited/A & E Construction Limited with Michelle Addington, told the Jamaica Observer last week.

For months, there have been questions about the fate of the development after work visibly slowed at the construction site and the previously visible website is now inaccessible.

According to Addington, deposits collected from 40 interested buyers were refunded last September.

They had wanted to own a piece of what was then being pitched as a high-end gated community made up of 41 two-bedroom detached units with sale prices starting at US$150,000 (about J$23 million) in its first phase. Prices would naturally go up for the 62 three-bedroom houses and 14 townhouses planned for phase two. Amenities were supposed to include “a swimming pool with a sundeck, a clubhouse equipped with a gym and lounge area, and a lush green park for recreation and outdoor entertainment”. There were also plans for “a tennis and basketball court, a football field, and a strolling path”.

There was an understandable buzz around Fairmont as it is strategically located in an area expected to boom because of its proximity to a section of the Montego Bay Perimeter Road. Indications are that a tolled entrance will be in that vicinity of the highway that is expected to significantly shorten the distance to Ironshore and beyond.

But the Addingtons, despite what they describe as “extensive experience in construction management and urban planning, specialising in innovative residential and commercial projects”, have found that the real estate market is tough.

“Securing sufficient initial funding has been our primary challenge. We needed to have completed a larger percentage of units to use as equity prior to securing the loan,” Martin Addington told the Sunday Observer. “We’ve revised our financial strategies and engaged new partners. We now have more equity in the ground, and we’ve also implemented stricter financial controls and a more conservative phasing approach.”

The snags encountered, he said, had hammered home “the importance of adaptability and thorough financial planning in real estate development”.

The new plan is to ditch the townhouse idea in favour of just two- and three-bedroom units and to scale back from three phases to two. The goal is now 76 units in phase one and so far they have built 10 three-bedroom units. According to Addington, the starting price point “remains competitive, aligning with market expectations and the high quality of living that Fairmont Estates will offer”.

He said their new approach is to do construction in more manageable stages and once they get going, they will only sell enough units — in the initial stages — to cover their loan.

“Moving forward, our revised sales strategy includes not releasing any units to the market until the next construction phase is actively underway. This ensures that our buyers have confidence in the progress and real-time developments of the project,” he added.

Fairmont is just one example of the significant interest in Jamaica’s red-hot real estate market.

As noted by some panellists discussing the topic of ‘Wealth Creation through Real Estate’ during the recently-concluded 10th Biennial Jamaica Diaspora Conference in Montego Bay, the returns are miles above other asset classes.

Citing data from the Realtors’ Association of Jamaica (RAJ) and the National Land Agency, which monitors real estate transfers, CEO of VM Property Services Allison Morgan painted a picture of a booming market that is creating wealth.

“The RAJ reported last year that the transactions that were just brokered through their membership body were almost 2,000. That is quite significant when you look at where they’re coming from five, six years ago, where they were closing 600 to 800 transactions per year. In fact, last year the numbers that came out of the government registration, which is the stamp office, showed that we’re almost at the $1-trillion mark for real estate. Compared to 10 years ago, that was about $10 million,” she said.

Morgan gave examples of how prices had spiralled in residential areas of Mona and Portmore.

She said a property with decent yard space, built in the 1970s, was selling for $22 million in Mona six years ago. Today it would have a price tag of more than $50 million and likely snatched up within six hours of hitting the market. Houses in the Caribbean Estates section of Portmore, she added, have also been an excellent investment since being bought for $3.5 million in 2003.

“Twenty years after, an untouched un-upgraded Caribbean Estates property is being sold for $40 million. Now, if you want to talk about returns… you have an investment of $3 million, and over the spread of 20 years it has given you $1 million return year over year,” said the VM executive to a room full of potential clients looking to access funding for a real estate deal.

“If you were to sell it, outside of your transfer tax you have no tax on asset gains or capital gains. That beats anything. If you had that money in a 401k overseas, if you were to break it, you’re going to face a lot of penalties. So if there was ever a good reason for asset reallocation, I just gave it to you,” she added.

Assistant general manager and chief development financing officer at the JN Group, Earl Samuels was equally effusive in his assessment of opportunities available in real estate locally.

“I’m responsible for development financing at JN Bank and over the past two years the portfolio has grown by more than 200 per cent; that is because of the great demand there is for development financing. It is one of the fastest growing sectors in the economy,” he said.

While he cautioned against investing “blindly”, Samuels pointed out that local real estate prices are a bargain when compared to other countries regionally and internationally and he urged diasporans and locals to invest before prices go up.

“This is the right time,” he said.

Addington obviously shares their view of the market and is determined to press ahead with his project in Irwin.

“Our team is focused on solidifying the financial and structural plans to ensure the project’s long-term success and sustainability.We’re committed to making Fairmont Estates a landmark project that positively impacts Montego Bay,” he told the Sunday Observer.