JMMB Fund Managers partners with Wise Construction on first residential development
JMMB Fund Managers Limited, JMMBFM, has struck a deal with four-year-old company Wise Construction to develop luxury homes, marking its entry into the residential real estate market as a minority partner.
The housing project is earmarked for a one-acre property in the Kingston 6 area and will feature a mix of 38 apartments and town houses under the name, Signature Smart Homes.
JMMBFM says the starting prices for the units would be about US$287,100 (J$38.7 million) subject to inflation. The sales of the units, in aggregate, would therefore pull in revenue of at least $1.5 billion, as estimated by the Financial Gleaner.
The fund company did not disclose the size of the investment in the luxury complex.
“The partnership agreement between JMMB Fund Managers and Wise Construction will be financed through a combination of debt and equity, with JMMBFM managed funds owning 40 per cent of the development. This arrangement will allow both Wise and JMMBFM managed funds to pool their resources and complementary areas of expertise with the overall aim of expanding their respective portfolios while providing diversification to investors,” JMMBFM CEO Christopher Walker told the Financial Gleaner.
The fund management company has pitched the housing development as resort-style living, with amenities such as simulation games room, gym, jogging trail, infinity pool, entertainment deck, floating deck and elevator.
Its ‘smart’ concept will provide property owners with safety features such as fire and flood protection and real-time video intercom structures, energy efficiency and electric vehicle charging stations.
The National Environment & Planning Agency approved the development in 2019 and construction is expected to be completed in 2021-22.
Signature Smart Homes represents the first direct investment in residential real estate construction for the financial institution, but it may not be the last.
Walker in a press statement noted that while there is no clear commitment at this time to pursuing similar projects, JMMBFM is keen on exploring other opportunities on a case-by-case basis.
Its investment in Signature Smart Homes is being done through the JMMB Optimum Capital (Real Estate) Fund.
The JMMB Optimum Capital unit trust portfolio largely holds commercial properties. The decision to enter the residential real estate business, according to Walker, comes in response to the demand from investors for a wider cross section of assets, for investment purposes.
Two years ago, the fund management company partnered with Proven REIT Limited on the acquisition of a 58,000 square foot of commercial space in the Portmore Pines Shopping Complex, in Greater Portmore, St Catherine.
The purchase, which was done via a sale with existing lease transaction, was structured and arranged by JMMB Group through its capital markets unit and is now leased to business process outsourcing operator IBEX Jamaica Limited and retailers.
Walker said that its entry into the residential side of the markets comes alongside increased demand from investors for diversification and alternate investments.
Unit trust funds with holdings in the real estate market have grown to seven, up from three players in the sector in 2015. Correspondingly, funds under management by these unit trusts have grown to over $37 billion, as at January 2020.
Wise Construction Group, located at Red Hills Road in Kingston, lists construction, repair and alteration of buildings as its core services. The company, which was incorporated in February 2016, names Douglas Gourzong, Adrian Genus, Leary Myers and Derrick Nelson as its directors, in Companies Office of Jamaica filings.