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Proven rolling out four developments costing US$140m

Proven Properties, the real estate arm of Proven Group Limited, will execute four developments this year costing US$140 million, at least two of which are joint venture partnerships.

It reflects the continued push towards a larger real estate portfolio real estate for Proven Group, amid the vicissitudes of financial assets that are being swayed worldwide by aggressive central bank policies to tighten up on money supply. The company is also in the business of wealth management, banking, private capital and property development and management.

“We are planning the following the developments this year: two residential along the north coast of Jamaica, one industrial development in Kingston and St Andrew, and one commercial complex in Barbados,” said Aisha Campbell, CEO of Proven Properties Limited.

She told the Financial Gleaner that the combined developments would cost US$140 million to construct. In Jamaican dollar terms, the investments are valued at around $21 billion to $22 billion.

Up to December 2022, the group’s assets, which amounted to more than US$1 billion, included property developments in progress totalling US$16 million. It also booked another US$6.5 million for property held for development.

The largest development of the upcoming four is a residential complex encompassing 206 villas and condos at Runaway Bay, along the north coast.

“The launch will be in March,” Campbell said.

Proven remains bullish on real estate despite the size of the construction sector declining 4.7 per cent in the latest December 2022 quarter, according to data released this week by the Planning Institute of Jamaica. Sales for construction inputs were down 12 per cent, while volume of mortgages disbursed by the National Housing Trust also recorded a decline of 24.3 per cent.

“With the right location and the right price, we think real estate remains a solid asset class,” Campbell asserted.

Campbell declined to name the Runaway Bay project. However, Proven Group’s quarterly earnings report made mention of the upcoming launch of SOL Harbour and Pimento Grove, as two major residential development projects slated for the north coast.

The industrial project for Kingston relates to a 21-unit warehouse development called the Kingston Gateway Warehouse Complex, a joint venture between Proven Properties and SAJE Logistics Infrastructure Limited, the property development, investment and logistics spin-off of the SAJE Group that grew out of the business reorganisation of the Shipping Association of Jamaica. Gateway, which was first announced in December 2021 as a US$13-million project, is now expected to enter construction by or before June.

The Barbados project will also be a joint venture, but its scope and the partner involved are unknown.

Proven “cannot disclose full details now,” Campbell said.

During the year, Proven Properties also expects to conclude ongoing projects, including the Aashgo warehouses in Grand Cayman. Proven Group will also be consolidating its Jamaica operations and moving to its new home, Proven Place, a joint-venture commercial development undertaken by Proven Properties.

Late last year, Proven finalised its VIA residential development on Lady Musgrave Road in New Kingston. That development was launched in 2019, with studios selling pre-construction for $21 million each. Some of those units have resurfaced on the market for double that purchase price, reflecting a buoyant real estate market.

Proven described that venture as providing real estate for middle-class Jamaicans, similar to the Sullivan development it embarked on years earlier. Proven, however, also focused on smaller developments geared at the higher tier of the market, with town houses selling for US$1 million.

Proven Group, formerly Proven Investments Limited, first hit the US$1-billion mark on its balance sheet assets at year ending March 2022, more than two decades since its founding.

Its holdings have been dipping since then due to volatility in the capital markets. Proven has also seen a compression of its book value or shareholder capital, which is currently at US$140 million, due to the downward revaluation of its investment portfolio. A year ago, its capital was estimated at US$164.3 million.

“This negative shift resulted from the impact of rising interest rates and market volatility on asset prices,” said Proven in its third-quarter earnings report for October-December 2022.

The company’s outlook is positive, however, “despite” the current volatile economic and market conditions, it said.

“We expect to derive much more consistent performance from our diversified revenue base and the anticipated improvement in top-line growth from the upward repricing of our marketable securities; normalisation of gross margins in the manufacturing business; continued growth in assets under management and wealth management activities; the completion of additional real estate development projects; and improved performance from the portfolio of associated companies,” Proven said.

Effective March 31, the company will have a new chairman – Rhory McNamara, who is currently the deputy chair – to replace founding Chairman Hugh Hart at his retirement.

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