Barita to develop commercial hub, residences

Barita Investments Limited, BIL, is laying the groundwork for major developments that will include conversion of the former Ruins complex into a river attraction, a resort project in St Mary, an ultra-modern warehouse on land acquired at Ferry in St Catherine, and new corporate headquarters in New Kingston.

The investment company, which has been growing at a fast pace since its acquisition in 2018 by private equity company Cornerstone, has signalled that real estate is its next frontier.

The developments are being done with an eye on food and energy security, it said, suggesting the inclusion of food production and energy generation projects.

An urban centre offering business and government services, as well as housing for workers within the development is slated for lands recently acquired in St Mary, totalling some 250 acres, that incorporate the Reggae Beach property just outside of Ocho Rios.

Reggae Beach was previously owned by Jamaican-Canadian billionaire and NCB Financial Group Chairman Michael Lee-Chin.

Paul Simpson, Cornerstone’s CEO and deputy chairman, said in an interview with the Financial Gleaner that the St Mary development alone is slated to cost between US$800 million and US$1.2 billion or more than $186 billion, and is to be completed in phases.

Its implementation is expected within 12 to 24 months, depending on planning approvals, and should take five to seven years to complete.

The St Mary land on which Lee-Chin had previously said he was planning to build a medical resort, as well as other properties, were acquired by Barita through its real estate fund MJR Real Estate Holdings Limited.

Titles Office records show that several contiguous properties, part of Prospect in St Mary, near the border with St Ann, were bought at the height of the COVID-19 pandemic in December 2020 by BIL Real Estate Fund Custodian. The land was vested in MJR in March 2021, immediately following the latter company’s incorporation.

“The purchase of the property fits squarely into the entity’s strategy, which targets the acquisition of undervalued real property with clear opportunities for material value-added through infrastructure development, repurposing and/or construction,” Jason Chambers, Barita director and chief investment of Cornerstone Group, said via email.

DEVELOPMENT

“The Reggae Beach property is intended to be transformed into an integrated multi-use development with high-end resort, luxury villa, and hospitality applications to the sea side twinned with residential and commercial services to include an urban centre complete with government and private services on the land side,” he said.

The Prospect lands alone are said to be valued at around US$50 million or almost $8 billion. The properties were sold to BIL Real Estate by Eight Rivers Limited. Eight Rivers had acquired one parcel in 2003 from Three Islands Limited. Both companies are listed as headquartered in Nassau, Bahamas.

Lee-Chin had previously disclosed that he bought the Reggae Beach property in 2003 through his investment company AIC. Lee-Chin associate and Robert Almeida did not immediately respond to Financial Gleaner requests for comment on the sale.

The transfer history of the properties shows that in August 2015 they were used to secure a US$4 million loan from National Commercial Bank Limited, the flagship operation of banking conglomerate NCB Financial Group of which Lee-Chin is majority shareholder. The bank’s lien was discharged in June 2019.

A current mortgage is registered on the St Mary and Ruins land titles to JCSD Trust Services Limited with the effective date of September 22, 2021 to secure the amount of US$38 million, the equivalent of almost $6 billion.

The Ruins was previously owned by hotelier Kevin Hendrickson, who had put the property up for sale in 2016. It was acquired in 2018 by Aurora Limited, from which it was purchased by Barita in December 2020.

Barita Chairman Mark Myers previously disclosed in the company’s second quarter results released in mid-May that BIL was “investment manager of the real estate portfolio” and that MJR’s ordinary shares are held in trust by JCSD Trust Services Limited.

The company disclosed at that point that $9 billion had been pumped into the real estate operation.

The company expected to recoup the seed funding via different channels, including property transactions, joint ventures and a potential listing of MJR on the stock market, Barita’s executive vice-president Ramon Small-Ferguson previously told the Financial Gleaner.

Barita is considering real estate developments at different locations running from St Mary to St Ann to St Thomas, the latter parish having gained the attention of investors following the launch of a highway project linking it with Kingston that is expected to open up a commercial corridor between them.

“By virtue of the significant investment that this development will attract from the hospitality sector coupled with the attendant commercial and residential needs the hospitality services will necessitate, we intend for the development of this property to add further vitality along the St Ann to St Thomas corridor,” said Chambers.

“There are several tailwinds to the planned development in our view, to include the return of international travel, and the expansion of flights to the Ian Fleming International Airport, which is in close proximity to the property,” he said.

A major realignment of a section of the north coast highway is in the planning stages and is to be undertaken to create more space for the commercial development, with the developer bearing the cost for the roadworks and acquisition of land needed for the realignment.

The Jamaica government, through the Factories Corporation of Jamaica, is also investing in a commercial centre in the St Thomas capital of Morant Bay that is meant to drive employment, a project Simpson indicated that Barita wants to mimic.

“Similarly, we expect this (St Mary) development to have as a centrepiece an urban centre, which will facilitate the amalgamation of government and private services to include the conducting of a wide range of commercial activities offered by retail outfits,” he said.

huntley.medley@gleanerjm.com