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Sygnus project delays stretch investment life cycle

Faced with project delays in the order of six to 12 months, real estate company Sygnus Real Estate Finance Limited, SRF, has pushed back the next starting point for the next cycle, which generally has a two to three-year rotation.

The delay in wrapping up the first cycle for the infant operation was said to be due to the pandemic.

Sygnus Group’s Chief Investment Officer, Jason Morris, said although construction continued throughout the health crisis, the delays in getting supplies from China to Jamaica drastically slowed the pace of completion.

“Happily, the supply-chain issues have resolved themselves, and we’re looking forward to getting to the finish line with all our projects for the first investment life cycle,” said Sygnus Group’s Chief Investment Officer, Jason Morris, in a report to shareholders.

The delayed projects include the new IMCA Jamaica country headquarters, now slated for handover at the end of May; the nine-storey Belmont One project, slated for completion in the summer; and residential projects Norbrook Wasser and Oceans’ Edge.

The handovers will mark Sygnus’ exit from the investments, which Morris said are expected to yield returns of at least $1 billion.

Three-quarters of the properties held by Sygnus Real Estate are still undeveloped, but at two key projects are the company’s pipeline, which Morris said would be done in the hospitality and logistics sectors.

Sygnus Real Estate CEO David Cummings said a 14-acre property at Mammee Bay, St Ann, was up for development but declined to provide details on the nature of the upcoming project, but Mammee Bay is known for tourism, and in its previous statements Sygnus had said it was considering a luxury resort project for that area.

Cummings said approval had been second from the National Environment & Planning Agency but would make no announcements until the development gets the nod from the St Ann Municipal Council.

Regarding the potential logistics development at Lakes Pen, St Catherine, Sygnus Group CEO Berisford Grey told shareholders that SRF intends to pursue the development in the medium term given that there is currently no real estate fund in Jamaica with the size to tackle a 55-acre industrial development.

“It is important because globally, the big theme for real estate investing is logistics,” Grey said.

“We are sitting on a strategic asset that is well aligned with one of the big themes in real estate investing and that will drive value for our shareholders,” he said.

The 55-acre plot lies at the southwestern quadrant of the Lakes Pen area, which itself is on the eastbound side of Highway 2000. With companies like GraceKennedy, Cari-Med Group, and Caribbean Broilers Group nearby, the area that once grew sugar cane is taking shape as an industrial zone.

The property held by Sygnus abuts the first five kilometres of Highway 2000. The land has been lying fallow for many years since the demise of the Bernard Lodge sugar factory. The company secured a change-of-use for the lands, moving it from agricultural to industrial usage.

Sygnus Real Estate has poured $7.8 billion into investment projects and property purchases since its listing as a start-up business in October 2021, but not all of those funds related to the first investment cycle, Morris said.

Some of the funds were used to acquire properties that will be developed in the upcoming investment cycle, he added, such as the Mammee Bay and Lakes Pen lands, as well as the old French Embassy in Kingston.

The full scale of the expenditures for the second round of investments is still being worked through, the chief investment officer said.

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