From left: Alistair Wade, senior associate, Collas Crill; Bobby Bodden, co-principal, Crown Square Limited; Shaun Myers, director, FirstRock Capital Cayman Limited; Scott Jones, attorney-at-law; Supriya Bodden, co-principal, Crown Square Limited.
FirstRock Real Estate Investments Limited is intensifying the push to diversify its asset base across the Caribbean and Latin America, with two major acquisitions in the Cayman Islands now in advanced stages of negotiation.
These developments, which are expected to be executed through Cayman subsidiary, FirstRock Capital Cayman Limited, follow the company’s recent $1.6-billion purchase of the Crown Square Commercial complex in Cayman Islands, marking a strategic pivot toward income-producing properties in high-growth regional markets.
“There are two other transactions on the island which we are currently working on. We hope to be able to divulge further information on those in the next few months,” said Shaun Myers, director of First Rock Capital Cayman Limited, in an interview with the
Jamaica Observer.
FirstRock has businesses in Jamaica, United States and Costa Rica, but the Cayman Islands has emerged as a focal point for its expansion. The country’s favourable tax regime, stable economy, and demand for high-quality commercial spaces have made it a magnet for multinational firms, and FirstRock is keen to capitalise on these opportunities.
Crown Square, anchored by the Cayman Islands Government and telecommunications giant Digicel, epitomises the type of investment FirstRock is prioritising — high-occupancy properties with reliable tenants and minimal risk exposure. Its next purchase is expected to mirror this approach, though financing details and timelines for the properties currently under consideration remain undisclosed.
According to Myers, the Crown Square property, located in the heart of George Town, “perfectly aligns” with FirstRock’s strategy of acquiring assets that deliver stable cash flows and yields of 8 per cent or more in US dollars.
“Having the Cayman Islands Government as an anchor tenant is an ideal position for any landlord on the island, as rents are received like clockwork,” Myers explained.
The communication tower, leased to Digicel, further enhances the property’s value, he added, given its high demand and strategic importance. With recent refurbishments already completed, FirstRock anticipates minimal capital expenditure requirements in the near term.
FirstRock structured the financing as a mix of debt and equity, in partnership with the Cayman National Bank (CNB). Looking ahead, it hopes to deepen relations with CNB’s parent company, Republic Bank.
As at the end of September 2024, FirstRock’s total assets stood at US$57.2 million, reflecting a steady growth trajectory driven by its regional acquisition strategy. The company noted that the Crown Square acquisition will “significantly bolster” this asset base, while reinforcing the company’s focus on securing prime properties in markets outside Jamaica. Ahead of the Crown Square acquisition, the company held little over US$20 million in assets in the Cayman Islands. Crown Square is the largest transaction for FirstRock Real Estate Investments to date.
“Despite completing this major acquisition, we expect 2025 to come with some continued challenges as we navigate the Jamaican property development space, with the aim of exiting all such projects in the next few months and moving to complete the acquisition of other investment properties such as Crown Square, across the Caribbean and Latin America, which we have in our pipeline,” Myers told the Business Observer.
For the nine months of 2024, FirstRock reported a net loss of US$1.45 million, driven by foreign exchange losses and rising interest costs. Still, the company says it has taken decisive steps to stabilise its operations. Administrative costs have been reduced by 20 per cent, and its debt-to-equity ratio, currently at 72 per cent, remains within manageable levels.
Further, FirstRock’s approach to acquisitions has evolved in recent years with focus on improving profitability and cash flow. The 2021 sale of pre-construction condominiums in Cayman Islands marked an early success, but the company’s subsequent investments, including the development of KFC restaurant locations in Costa Rica, reflect a more deliberate focus on stable cash flows.
“FirstRock is focused on acquiring Class A or recently renovated Class B properties, which is where the strongest demand is. Also, real estate related to quick-service restaurants (QSR), particularly the stronger brands, continues to generate consistent returns for landlords, and as such this is another area of focus for FirstRock,” Myers said.
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Publish date : 2024-12-24 16:11:00
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