Eppley buys 50% stake in Mall Plaza
Company enters joint venture with Norbrook Equity Partners for Spanish Town Rd property
Less than a year after cross-listing on the Jamaica stock exchange (Jse), eppley Caribbean Property Fund Limited – Value Fund (CPFV) has reached an agreement to acquire a 50 per cent stake in Mall Plaza in Half-way-tree and a three-acre property at 693 spanish Town Road in the capital city.
Mall Plaza, which has undergone multimillion-dollar renovations in the last few years, is a fully tenanted location with 40 shops on 2.3 acres of prime land covering more than 69,000 square feet. As part of the acquisition, CPFV will assume control of the management and operations of the property.
“Mall Plaza is an iconic property in Kingston’s commercial landscape,” Justin Nam, general manager of Eppley Limited and Eppley Caribbean fund manager, told the Jamaica Observer.
“Mall Plaza has been a feature in the lives of generations of Jamaican shoppers. Its location in the heart of Half-way-tree, close to critical transportation routes and growing residential developments, makes it difficult to replicate and of enduring value. The building was recently renovated and is in excellent condition. We are privileged to add Mall Plaza to Eppley Caribbean Property Fund’s (ECPF) portfolio of high-quality commercial properties and look forward to working with our partners and tenants to take this important asset to the next level,” Nam added.
The 693 Spanish Town Road acquisition forms part of a joint venture executed with Norbrook Equity Partners in which each party will own 50 per cent of the 73,500 sq ft property which houses a warehouse and office space. CPFV has already signed longterm leases with tenants, pending renovations to the property which formerly houses a drink manufacturer that exited the Jamaican market a few years ago.
“We’re delighted to continue to increase our investment in Jamaica and more specifically industrial assets, in Jamaica. These properties are part of Jamaica’s manufacturing and distribution supply chain. They are difficult to replicate and are in strategic locations. Furthermore, their operating performance is resilient across market environments,” Nam told sunday Finance.
The acquisitions bring CPFV’S total portfolio to 14 properties between Barbados and Jamaica spanning over 740,000 sq ft. They further solidified CPFV’S status as the largest listed real estate mutual fund in the Caribbean which trades on the Jamaica, Barbados, and Trinidad stock exchanges.
CPFV’S last acquisition on Marcus Garvey Drive was funded with 15,447,465 shares to Seprod, while the newest gains were all cash transactions funded by resources and acquisition financing. CPFV has also repurchased BBD$429,053 ($30.4 million) worth of shares from the JSE for its financial year due to the company seizing the opportunity to buy shares trading below its net asset value of BBD$0.69 ($48.89).
Despite all of these major positives, CPFV’S net profit attributable to fund shareholders for the 2020 financial year declined by 51 per cent to BBD$1.89 million ($134 million) mainly as a result of a BBD$2.5 million share of loss due to BBD$10.7 million in fair value losses on its CS & C Joint Venture in Barbados. However, funds from operations improved by two per cent to BBD$2.8 million, while its total asset base grew to BBD$108.9 million ($7.7 billion) which supported the fund’s BBD$5.1 million ($363 million) dividend over the period.
In spite of these events, Nam believes that CPFV will continue to deliver solid value over the near term to investors.
“We would like to take the opportunity to reiterate that ECPF’S dividend policy is to distribute the vast majority of its funds from operations in the form of cash dividends each year. ECPF has a strong balance sheet with significant cash and low debt. We expect to maintain our dividend policy while we continue execute our strategy of diversifying and growing our regional portfolio through additional acquisitions,” Nam said.