Sagicor X Fund still watching market conditions
Published:Friday | June 2, 2023 | 12:48 AM
Sagicor Real Estate X Fund Limited has bumped up its investments in the Sigma Real Estate unit trust fund, pushing the value of those holdings close to $1.3 billion last year.
Sagicor X Fund is primarily invested in a single hotel property in Florida, having long shed the majority of its resort hotel portfolio, then disposed of its shareholdings in
Playa Hotels & Resorts during the pandemic.
In 2022, the fund invested primarily in bonds and the unit trust investment vehicle, while waiting for market conditions to improve and opportunities to arise for direct property purchases, said Sagicor X Fund CEO Brenda-Lee Martin.
The additional investment in Sigma was meant to capitalise on the strength of the Jamaican real estate market, she said.
The value of X Fund’s investment in Sigma Real Estate has climbed from $868 million to $1.29 billion as a result. The company holds a five per cent stake in the portfolio, and books gain from property valuations and rental income.
Both entities fall under Sagicor Group Jamaica. However, Sagicor X Fund is no longer a subsidiary of Sagicor Group Jamaica Limited, the latter having disposed of its 29.3 per cent interest in two transactions.
Investment properties
Sigma Real Estate, operated by Sigma Global Funds, consists of 14 investment properties, which are mainly commercial real estate. It recently acquired commercial units in a development called New Brunswick Village in St Catherine, as well Goshen Pen lands for commercial development at Bernard Lodge, the CEO disclosed.
As at December 2022, the Sigma Real Estate Fund’s net asset value was $24.3 billion.
The 14 investment properties represent almost 93 per cent of the portfolio’s total value. Occupancy levels for the commercial properties averaged 87 per cent.
Speaking at the company’s annual general meeting, Martin said Sagicor X Fund has signed a management agreement with Sagicor Property Services Limited, which will provide investment advisory services and manage and maintain the Sigma commercial property portfolio.
Last year, Sagicor X Fund reported a spike in revenue from $5.8 billion to $7 billion, due to recovering business in the hospitality sector and improved performance of its single hotel asset, Doubletree Hilton in Orlando. Occupancy levels at the hotel rose from 83 per cent to 93 per cent. As such, Sagicor X Fund’s annual earnings grew by 24 per cent to $466 million.
Going forward, Martin said Doubletree will be targeting the group travel segment, which is currently seeing higher demand. A proposal to expand banquet space at the hotel is being considered, Sagicor X Fund Chairman Vinay Walia said.
Projections are that the group business will generate an additional US$2 million in revenue ($310 million) for the hotel.