Fri | Jun 22, 2018

National Investment Fund plans two real estate projects for St Ann - Winds Up Portmore Development Company

Published:Friday | June 23, 2017 | 12:00 AMAvia Collinder
Audrey Deer-Williams, senior director of investments at National Insurance Fund.

National Insurance Fund (NIF) will be rolling out two developments in St Ann, one of which will provide housing.

The state-run pension fund currently holds a real estate portfolio valued at around $12 billion, but it's mainly invested in hotels and other commercial property, although NIF has a two-decade history with residential real estate.

In other adjustments to the fund's real estate portfolio, it is in the process of winding up a majority-owned entity used to develop a mall in Portmore.

The St Ann projects will break ground before year end, said NIF senior director of investments Audrey Deer-Williams, however, the fund is still in the process of recruiting developers.

The commercial project, comprising office space, will cost around $500 million to develop, said Williams, but no price tag has been attached to the housing project, whose design will be left up to the winning bidder.

NIF's first housing development was Village Green, also in St Ann, done nearly 20 years ago. Since then, the fund has favoured the acquisition of residential units over developing greenfield projects. Deer-Williams said the NIF once again decided to invest in its own development due to demand for housing in Llandovery as new hotels go up in the area, and where it already owns land suited for residential purposes.

NIF issued Requests for Proposals for both St Ann projects - the tenders for the commercial development are being reviewed, while the residential bids are due by the end of July.

The NIF is the investment arm of the National Insurance Scheme (NIS), which provides benefits to Jamaicans of pensionable age on a bi-weekly basis. The fund in March held around $95 billion in assets, with real estate comprising around 13 per cent of the total.

The new office building slated for St Ann's Bay is a 27,000-square-foot development consisting of two towers, each rising to two floors. The land is already owned by the NIF.

For the Llandovery housing project, the style of the development is being left up to developers.

The most recent developments completed by the NIF include the $2.5-billion Braco resort upgrade, a hotel property it owns in Trelawny and now managed by the Spanish Melia chain.

The fund earns more than $200 million per year from property rentals. At last estimate, Deer-Williams said NIF had a return on its invested assets of 11 per cent on average for the total portfolio, but the returns for the real estate component itself were not immediately available.

Meanwhile, the NIF, in line with the Government's agreement with the International Monetary Fund to wind up non-performing subsidiaries, has initiated the winding up of Portmore Development Company (PDC).

"This was the company which was responsible for the development of the Portmore Mall. All the shops have now been sold. It was a special-purpose vehicle whose work is now completed. It will be one less company on the government's books," Deer-Williams said.

The cash left over will be distributed to share-holders. Deer-Williams, who is the appointed receiver, is inviting all creditors to submit information on what they are owed by Portmore Development Company. She said, however, that the notice is a formality, as the company has no creditors at this time.

NIF holds 51 per cent of PDC, while the Urban Development Corporation owns the other 49 per cent.