Sagicor projects on hold

Published: Friday | September 11, 2009

Dionne Rose, Business Reporter

Rohan Miller, vice-president of investments at Sagicor Life Jamaica. - File

Sagicor Life Jamaica has put on hold five projects that would have delivered new homes to the market and offer relief to motorists hungry for parking space in the capital's congested business and financial district.

The projects, which amounted to about $4 billion at announcement, would mostly have been rolled out in Kingston - one was in St Ann - said Rohan Miller, Sagicor vice-president of investment.

The multi-storey parking garage which was to be built in New Kingston would have cost $1 billion. The idea mooted by Sagicor some two years ago, according to reports at the time, would offer companies and individuals the parking space to buy.

The parking facility was to have been built across from Sagicor headquarters at 28-48 Barbados Avenue.

High-end segments

Miller said the company, were it to go ahead with the residential real estate developments, would not be able to entice buyers. Two of the properties would have been priced at the middle to high-end segments, where the market is showing the steepest decline in demand.

The Seymour Lands development in Kingston for which Sagicor fought so hard to win approval of both the authorities and homeowners, was to be the most expensive of the five projects.

It would have been a $1.6-billion investment for Sagicor, which planned to build 32 two-bedroom apartments and 23 three-bedroom townhouses on the 4.25 acre property acquired by the insurance group back in 2007.

The estimated sale price on the units would have been $25 million to $40 million.

"The market is going through some amount of adjustment now at that price range. The expectation is that when the economy rebounds, the market should rebound and at that time we will look at the project to make a determination to go forward with it," Miller said.

For now, the company is wary of adding inventory to the housing stock at a time when no one is buying top-end properties.

"It is our intention to revisit it and see whether or not the market conditions would allow for us to develop the property at the proposed level," said Miller.

"At that proposed level, we were really into the mid to high segment of the market and for that part of the market, you have to be careful as to when you develop and what you develop."

A smaller development of 30 apartments for $250 million has been shelved too, though at 12 million per unit, the apartments are in a lower price range and the project approved by the planning authorities. The property is located on Strathairn Avenue, just behind the Winchester Business Centre, which is also owned by Sagicor.

Another 30-apartment development for Shortwood Road is still awaiting approval, but that, too, is on hold.

The development in St Ann would also have been a $1-billion project, providing for 120 homes on the tranquil coastline of Llandovery in St Ann. That project has faltered with the economy, Miller said, though it, too, had hurdled regulatory approval, including environmental permits for the ecologically sensitive property.

"It is one of those developments where people would have determined what they do there," Miller said of the seaside residential apartments.

Miller said there would have been 120 units, suggesting that the plan may have been scaled back even before it was shelved, as the environmental impact assessment that Sagicor commissioned to satisfy the National Environment and Planning Agency and planning regulations made mention of 300 units, including town houses, apartments and studios, and complementary facilities such as a spa - on four hectares of the Llandovery coast.

"There is some amount of downturn in economic activity," said Miller.

"It is best for us to wait, review the project, the market conditions and determine when exactly we do go to full development on this project," he said.

The Emerson Court apartments, acquired by Sagicor Life Jamaica when it bought Blue Cross in December 2008, have been put up for sale by the insurance company. - rudolph brown/photographer