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Barita spends $1b more on property, profit stable

Barita Investments Limited pumped another $1 billion into MJR Real Estate Holdings Limited between April and June this year, and has started to offer investments in its property fund, its latest financial report shows.

The boost to its real estate operations came amid its report of flat profits for the second quarter.

Barita did not disclose what new properties it acquired in the third quarter, but there are reports that a deal for a 1,600-acre property in St Mary is advanced. However, checks by the Financial Gleaner showed that the property has not yet been transferred to Barita or its related entities.

Among its recent real estate acquisitions is the 250-acre Prospect property in St Mary that includes Reggae Beach, which was previously effectively owned by billionaire businessman Michael Lee-Chin. Barita’s MJR also acquired the Ruins property in Ocho Rios and several pieces of real estate in Kingston.

Barita had previously poured $10 billion into acquiring 1,900 acres of land for development through MJR, which was incorporated just over a year ago.

As a highlight of the third quarter, Barita listed the “Revamping and relaunching our real estate unit trust product to make it more accessible through a reduction in unit price and minimum investment – a 10-to-one split – as well as shorter lockup periods (through which) we subsequently allowed our clients access to the assets in our managed special purpose vehicle, MJR Real Estate Holdings”.

Barita Chairman Mark Myers said in the statement that the company planned to add value to the real estate portfolio by carrying out infrastructure work, repurposing and construction on the lands to create residential, resort, commercial and light industrial developments.

Barita officials have said that the long-term plan for the real estate investments include an offer of shares on the Jamaica Stock Exchange to attract investors.

In the third quarter ended June, Barita earned $1.55 billion after taxes, compared to $1.6 billion the previous year. Over nine months, profit rose from $3.67 billion to $3.8 billion.

The $1 billion in new property acquisitions in the June third quarter was included in the $10-billion worth of investments in various activities by Barita in the period. This included $5 billion in private equity transactions and a continuing $850-million spend on a technology upgrades.

The company is also said to be still prospecting for new areas of investment in Jamaica and the Caribbean region as its profit and asset growth continues. From $363 million earned in year ending September 2018, Barita’s profit has climbed steadily to $1.7 billion in 2019; $2.7 billion in 2020; and $4 billion in 2021.

Operating revenue grew overall by eight per cent to $7.2 billion in the current nine-month period.

One area of revenue that saw a decline was fees and commission income, which fell seven per cent, or $200 million, to $2.5 billion, mainly due to weaker performance in Barita’s asset management and investment banking business lines.

“The group will continue its efforts to grow assets under management and capital markets activity through consistent deepening of our capabilities, as well as building liquidity to fund investment banking deals,” Barita’s directors said in the financial report.

The company highlighted an investing strategy of bulking up on cash during the pandemic, which, according to suggestions by its chairman, placed the business in a position to snap up assets in a skittish market, with more traditional investment outfits in a wait-and-see mode.

The company raised $34.5 billion of funding between March 2019 and September 2021.

Myers said this cash accumulation positioned Barita to take advantage of price dislocations, which, he noted, has been a feature of the post-pandemic period.

Over the past year, Barita also grew its total assets 31 per cent year on year to $110 billion, half of which is pledged as as collateral.

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