Sagicor X Fund makes first purchase in Cayman, taking more ‘assertive’ approach to investing

Sagicor Real Estate X Fund Chairman Howard Mitchell says a new deal for commercial property in Cayman Islands, acquired for US$10 million, is the opening play in a one-year programme that will reflect an adjustment of the company’s conservative investment mindset.

Sagicor X Fund recently closed a deal for retail space spanning more than 14,700 square feet at The Strand Shopping Centre, in Grand Cayman. The price paid is the equivalent of about $1.58 billion in Jamaican currency.

Mitchell, who has been X Fund’s chairman since March of this year, said the property was bought from a real estate holding company called WM Hill Limited.

He described the deal as a significant milestone in Sagicor X Fund’s strategy to diversify its portfolio across strong, buoyant real estate markets. He noted that while the size of the space acquired was not very large, the fund expected to derive good income from the tenanted property.

“It’s premium real estate; high-margin, premium real estate,” Mitchell said in an interview with the Financial Gleaner, however, he declined to comment on rental rates being charged.

“This is high-end businesses in there; serious, deep-pocketed traffic,” Mitchell said of the profile of the stores and their patrons.

Since the launch of Sagicor X Fund in 2013, the company has been “fairly conservative” in its approach to deployment of capital and the acquisition of assets, the chairman noted.

“We can’t throw off the cloak of conservatism all at once and go for the big things, but what we’re doing is ... not being aggressive, but rather, being assertive,” Mitchell said.

The company is on the lookout for premium, high-end, high-value properties in other markets that will hold value or increase in value, while providing cash flow, he added.

“Over the years, we’ve been just holding on to assets, and to some extent that has not pleased some of our shareholders because they want income as well,” he said.

The company, which holds financial investments and owns a hotel in Orlando, Florida, earned $648 million in profit amid revenue of $8 billion in 2023. Its current results are underperforming, with half-year earnings of $298 million falling substantially below the $420 million of profit in the comparative 2023 period.

The acquisition of the block of units at The Strand Shopping Centre should be seen as a first move by a more ‘assertive” X Fund, Mitchell indicated.

“We do have a structured plan over the next year to shift into more income-earning, or high-value, investments; and you will see it unfold,” he said.

For the deals that are in the making, Mitchell said they would not be restricted to Jamaica or the Caribbean.

The Strand Shopping Centre, situated near hotels such as The Ritz-Carlton Grand Cayman and Westin Grand Cayman, boasts a diverse mix of well-known brands. The businesses operating there include restaurants, banking services, and other key retail services, Sagicor X Fund said in a press release.

As to the company’s war chest, Mitchell said only that “it is in the billions”.

Sagicor Real Estate X Fund Limited holds more than $6 billion in cash and investments, amid total assets of $31 billion.

neville.graham@gleanerjm.com