Sygnus Real Estate Finance Limited (SRF) up to the half-year mark or six-month period ended February said it has deployed over $2 billion in investment commitments, almost doubling the $1.05 billion recorded for the same period last year, while moving to complete over $4 billion in real estate projects this year.

A member of the Sygnus group, the real estate subsidiary said it continues to unlock value from major real estate investment assets (REIA) — attaining growth of some 38.7 per cent over the reporting period and for the first time exceeding the $14-billion mark to close at $14.8 billion. This amounted to $10 billion in February 2022 and $13.7 billion at the end of its financial year in August 2022.

As a result of the growth in its investment asset, SRF during the six-month period said it was able to advance the construction of its $3.7-billion, nine-storey commercial tower at Belmont Road, which is now 82 per cent complete and on track for timed completion by mid-2023. Over the period, the company further said that it was able to advance the build out of its industrial warehouse facility on Spanish Town Road to 93 per cent completion even while it harvested investments in real estate investment notes (REINs) to make further repayments on a $1-billion investment in Montego Bay as it also advanced the value creation process for its strategic hospitality and industrial assets in Mammee Bay, St Ann, and Lakespen, St Catherine, respectively.

“Over the course of the next one to two quarters, the group is expected to complete $4.8 billion of real estate projects excluding third-party REINs and exit a minimum $2.3 billion of investments in calendar year 2023. SRF has already set its sights on executing new investments to replace the ones that are being exited,” the company’s directors said in an interim report to shareholders.

The investments, which up to February were spread across nine sub-categories of real estate investment properties, saw the largest allocations being made to hospitality at 37.2 per cent, industrial at 16.6 per cent and commercial investment property at 14.3 per cent.

“SRF’s capital was also allocated across three investment categories, namely property investments at 75.9 per cent, REINs at 15.5 per cent and investment in joint ventures at 8.6 per cent,” the report further said.

Executive vice-president and chief investment officer at Sygnus Jason Morris said that with SRF now in the process of exiting some investments and also in the final stage of executing over $4 billion in projects, the company at some time this year may consider taking steps to execute its first dividend payment, but after securing capital for new investments and debt repayments.

“SRF continues the process of unlocking value from the major assets on its balance sheet, as it seeks to increase book value per share from the current level of $22.32 while striving to maintain its three-year track record of generating a double-digit return on equity,” Morris stated.

The company, which tends to extract the bulk of value from its business model at the end of a financial year, when projects are likely to have been completed or exited, said that there is high expectation for its uneven interim financial results to be normalised by the end of the upcoming financial year when revaluations are done.

At the end of the six-month period, total investment income or core revenues amounted to $9.4 million compared to $30.6 million in the corresponding period of last year. This, the company said, was primarily driven by higher interest expense owing to increased use of debt to finance the growth of REIA. Total investment income in August 2022 totalled $1.4 billion.

SRF in its report noted that given there was no material total investment income during the period, net loss attributable to shareholders grew to $301.9, compared to $124.7 million last year, also driven by higher interest expense. SRF at the end of last year reported a net profit of $693 million.

“The group remains fully focused on executing its strategy of unlocking value in real estate assets, as it seeks to continue increasing shareholder value,” the report also said.