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Proven REIT to field super studios as next real estate project

Published:Wednesday | February 18, 2015 | 12:00 AM
Johann Heaven, vice president of investments, Proven Management Limited.

Proven REIT Limited will break ground for a new 20- apartment complex at Sullivan Avenue in Kingston in March, for completion a year later, says Johann Heaven, vice-president of investments at Proven Management Limited.

The new investment in the real estate segment was noted in Proven Investment Limited's nine-month earnings report.

The company has acquired a two-third acre of land for the project. The cost of the land was not disclosed, but Heaven said the cost to develop the apartments on the property is in the ballpark of $150 million.

The apartments - all super studios ranging from 600 to 700 square feet - will each sell for $10 million to $12 million, he said, while noting that energy efficiency will be emphasised in construction and that solar-generated electricity would power the common areas.

second project

It's Proven REIT's second real estate project. The company is currently developing 31 studio apartments on Kingsway Avenue in Kingston for US$3 million - a project to be completed in May. Half of the units are already sold.

Proven Investments reported assets of US$347 million, with subsidiary Proven REIT contributing just US$1.6 million to group assets at December 2014. Proven Investments and its subsidiaries are operated by Proven Management.

Proven Investments will be doing a new rights issue targeting US$20-$40 million in funds, which the company indicates is for new investments.

Heaven said that overall, other Proven Investments acquisitions "continued to perform above expectations, and we are seeing this in the results".

Acquisitions during the quarter under review included Access Financial Services Limited, in which PIL acquired a 49.27 per cent stake in December.

Access made $239 million in net profit at nine-month September 2014, up from $199 million, but where assets grew overall to $1.37 billion relative to yearend December 2013, its loan portfolio remained at a flat $1.12 billion in the same period.

During the December quarter, Proven Investments also increased its stake in transport company Knutsford Express Limited. At half-year November 2014, Knutsford grew revenue by 51.6 per cent to J$206.9 million. Profit after taxation for the six months period grew by 58.4 per cent to $29.4 million.

For Proven Investments itself, the asset management company reported net profit of US$4.68 million, an increase of 67.6 per cent when compared to the prior year, inclusive of one-off net gains of US$1.56 million from the acquisition of First Global Financial Services. Net revenue for the nine-month period totalled US$9.30 million, an increase of 47.6 per cent, which PIL attributed mainly to increases in securities trading gains, net interest income and fees and commissions.