Durrant Pate/Contributor

FirstRock Group is announcing that it has registered average growth of 60 per cent in just under five years and is feeling optimistic about the future. 

FirstRock currently boasts total assets valued at US$90 million, which represents a cumulative annual average growth rate of 60 per cent coupled with a staff complement across all its subsidiaries that now exceeds over 250 employees in Jamaica, Costa Rica, Guyana, and the Bahamas.

Shaun Myers, group vice-president of finance and planning, attributes First Rock’s progress to “prudent and robust management of its business activities, regional expansion, and acquisitions”.

“The group was started with a real estate investment company, FirstRock Real Estate Investments (formerly FirstRock Capital Holdings) has since expanded to include companies in various business segments. We continue to maintain our strategy of diversification across industries and jurisdictions,” he added.

FirstRock Real Estate Investments, as the name suggests, is the group’s real estate investments arm. The company’s earnings are primarily driven by property income, which consists of rental income, income from sale of properties and income from movements in property values.

Given the timing differences associated with the various classes of real estate transactions, property income will fluctuate in the short to medium term.

Property income to become more normalised

However, over the long term, as the company continues to streamline its projects and benefit from economies of scale, this income is expected to become more normalised. FirstRock also maintains a relatively small portfolio of financial assets from which it earns investment income.

Within this portfolio are loans to entities largely within the group. All transactions are priced at market rates and have been tested and validated as being at arm’s length. As at the last reporting date (June 2023), loans to entities within the group represented only five per cent of total assets.

On the market right now are three major developments, Hambani Estates, Bonne Chance-both in Kingston and Torres los Yoses in Costa Rica. Hambani broke ground in 2021 with eight of the units now being sold and the remaining four now being introduced to the market.

Construction of the twelve 8,500-sqft luxury homes has been steadily progressing, with a revised completion schedule of December 2023. The development is currently 66 per cent presold with the remaining units now being introduced to the market to maximize profits and shareholder value.

Delays in real estate projects

Acknowledging the delays originating from the COVID-19 pandemic, FirstRock is fully committed to completing the project according to the revised construction schedule.

Denroy Pusey, assistant vice president of real estate business at the FirstRock Group, explains, “almost all real estate developments that started during COVID have experienced delay, and Hambani is no exception. However, the handover of units will commence in a matter of weeks.”

An upcoming FirstRock project is Bonne Chance, a luxury nine-storey high-rise, housing 43 units. Approximately 70 per cent of the units are reserved and construction is slated to commence this quarter. The company’s core focus is Real Estate, which is why the name was changed in 2021 from First Rock Capital Holdings to First Rock Real Estate Investments – to better communicate this focus to the market.

Diversification

The acquisition of Dolla Financial in March 2020 was a speculative opportunity which the company seized upon. However, in keeping with the company’s core focus, and to reduce the complexities brought on by having a microfinance entity within the external audit of the real estate company, the decision was made to sell the holdings in Dolla to FirstRock Private Equity in March 2021.

The sale generated a gain of approximately US$800,000 as evidenced in the 2021 audited financials. The sale price was determined by an independent valuation done by Ernst and Young.

FirstRock Private Equity is the private equity investment arm of the group, which commenced operations in January 2021 and has since successfully grown to US$25 million in assets in just 2.5 years. The company has three portfolio companies under its ownership and management, extending beyond the borders of Jamaica: Dolla Financial, Optimum Distributors and My Ocean (Bahamas).

FirstRock Private Equity is projected to complete two further acquisitions before the close of this year, which will see its totals assets increase significantly. Dolla Financial operates in the micro-lending industry with operations in Jamaica and Guyana. Optimum Distributors is one of Jamaica’s premier dental and medical supply companies, serving over 400 customers island wide.

My Ocean is a Bahamas-based based manufacturing company, specialising in unique, hand-crafted art pieces. In February 2023, FirstRock acquired a majority stake in Century21 Heave-Ho Jamaica, one of the island’s top Real Estate brokerages.

This is in line with both companies’ strategic objectives to forge strong partnerships with key players within the real estate industry. The FirstRock Foundation is the charitable arm of the Group, with a primary focus on education through the provision of annual scholarships and support to students at the secondary and tertiary levels. To date, the Foundation has donated approximately J$7 million toward nation-building.

Last year First Rock’s annual earnings were up to US$4 million, a US$1 million more than 2021’s figure. However the share price year-to-date has declined 39.24 per cent and last traded at J$8.50.