FirstRock Real Estate Investments Limited has got an extension on its loan from Sagicor Bank Jamaica to complete its Hambani Estates development in St Andrew that is now set to be delivered in early 2025.

That’s the word from FirstRock Real Estate Director Ryan Reid who has been leading the FirstRock Group of companies with his co-founder, Dr Michael Banbury. The Hambani Estates project is FirstRock’s first development project which aimed to sell 12 townhouses priced at between US$1.8 – US$2 million each that were originally scheduled to be completed by the third quarter of 2022. This development is located behind the United States Embassy on Bamboo Avenue in St Andrew.

However, that timeline was affected by numerous factors over the last two years which resulted in the project being delayed. Now, the company is moving with expediency to complete the development and sell the units to realise the returns. Sagicor Bank approved the loan extension earlier this year in March.

“A nominated subcontractor has now been onboarded to drive the further completion. Given that these are standalone homes, we expect to complete delivery of the remaining homes by early 2025,” Reid explained in an e-mail.

FirstRock Real Estate began its foray into development real estate with its Hambani Estates project when it broke ground in mid-2021 and secured a US$10-million loan split into two facilities from Sagicor Bank in March and May 2022 for two years to do the project.

Since then, FirstRock prepaid US$1.24 million in January on its Hambani loan as it closed the first sale of a unit in the project. However, FirstRock’s first quarter financials revealed that the cost of sale related to its ‘property inventory’ was US$1.65 million. There was also a lull in construction activity at the site earlier this year.

“After we commenced repayment of the Sagicor facility earlier this year, bringing the principal down to under US$9 million, the bank granted an extension. Further discussions are underway to align further repayments with projected completion and sales of the remaining Hambani units,”

FirstRock Real Estate has been shifting its focus away from Jamaica to other Caribbean markets in recent times due to the slowdown in the domestic market. The company, which had announced its Bonne Chance development at Brompton Road, New Kingston, St Andrew in February 2023, has since decided to rescope the project.

It is now focusing on the Cayman Islands and Costa Rica for prospective growth opportunities. FirstRock completed the development of a KFC restaurant in El Roble, Costa Rica, and signed a 20-year lease agreement in January before divesting the units in its Torres de Heredia residential development in Costa Rica this past February. It then announced in August that it had signed an agreement to acquire a commercial property in George Town, Cayman Islands.

“FREI, through its subsidiary FirstRock Capital Cayman, has entered an agreement to acquire a fully tenanted investment property in Grand Cayman, which is intended to significantly bolster the group’s rental income going forward. This will represent our largest acquisition to date. Plans to relocate the group’s headquarters have been placed on hold,” the FirstRock director responded on its Cayman venture.

These moves come at a time when the company had US$12.07 million in loans due this year and US$10.20 million in investment property held for sale at the start of the year. Reid mentioned that the company will seek to refinance and repay some of its maturing debts while tackling some of the new prospects that lie ahead for the real estate business with US$57.18 million in assets.

FirstRock Real Estate has had a tough first half of 2024 as lower unrealised gains from its investment properties pushed it into a US$779,105 net loss compared to a US$627,844 net profit in the prior period. Despite these losses, the company still boasts US$34.08 million in shareholder’s equity and stable debt ratios.

FirstRock Group Limited (formerly FirstRock Capital Resource Limited), management company or investment manager of FirstRock Real Estate) is currently benefiting from the growth in FirstRock Real Estate’s asset base under the revised management agreement where it earns a 1.8 per cent management fee. This is in comparison to the previous two per cent management fee which was charged on the net asset value or shareholder equity up to September 2021. That change has resulted in that management fee nearly doubling from US$677,949 in 2021 to US$1.11 million in 2023.

FirstRock Group returned to court on October 2 in its case against former executive director and vice-president of real estate Pierre Shirley. According to the claim form submitted in the Supreme Court of Jamaica in October 2022, Shirley has refused to satisfy and repay $32.62 million owing under the staff loan policy and employee agreement dated July 2019. The former FirstRock executive accessed the facility to borrow $41.19 million but has not repaid the excess sums after leaving the company in March 2022.

FirstRock Group is seeking at least $32.56 million to be repaid at a commercial interest rate of 13 per cent starting from November 2022 until it is repaid. Shirley currently resides in Florida where he works as an agent for the New York Life Insurance Company.