Sagicor’s Building A BIG Water Park In Runaway Bay. Own A Piece For As Little As J$500

Yes! Sagicor is seeking to raise J$1 billion, primarily to construct a water park at their Jewel Runaway Bay Beach & Golf Resort in St. Ann. They have created a company (Sagicor Real Estate X Fund Limited) and are selling shares in it (through an initial public offering). Your opportunity at owning a piece of greatness begins today. Read on.

What is Sagicor Real Estate X Fund Limited?

The name Sagicor Real Estate X Fund Ltd, can evoke different thoughts. I think it has something to do with that X in the name. It can give the appearance of some undercover secret agent Mr. X, or some exclusive operation somewhere. However don’t be disheartened. Until we find out what the X means, we can look past that, and see the wonderful investment opportunity being created by Sagicor.

The Short & Spicy Version

The short story is that Sagicor has created a company that will manage its real estate investments (all its hotels and other properties they own), and they want that company to be listed on the stock market. On top of that, they want to raise J$1 billion to build a water park in Runaway Bay and also make further investments.

Long & Unwieldy Version (Can be confusing)

What is happening is that, Sagicor Life Jamaica and Sagicor Pooled Investment Funds Limited (PIF), a wholly-owned subsidiary of Sagicor Jamaica sold properties to Sagicor Sigma Funds a registered unit trust operating in Jamaica. Wait there’s more. That unit trust has different portfolios and the Sigma Real Estate Portfolio is one. So what has happened is that the unit trust now owns these properties and Sagicor Life has shares in the unit trust.

Sagicor Real Estate X Fund (the company we’re interested in), will own units in the Sigma Real Estate Portfolio and expects to derive income from those units owned. Sigma Real Estate Portfolio (who owns the properties) in turn expects to derive rental income and/or realized capital gains from twelve (12) properties acquired by it from Sagicor Jamaica and PIF.

Sagicor’s X Fund Structure

The Listing

Sagicor Real Estate X Fund Limited is the name of the company that will be listed on the JSE’s Main Market and its aim is to create a liquid real estate option for the general public – meaning it is creating an easy way for the small man to buy and sell real estate. You would be buying shares in a company that is focused on buying real estate, and reaping the benefits. It provides great diversification away from fixed income investments. Additionally, because real estate is normally illiquid and requires a large amount of cash up-front, it is normally not as attractive and available to all, however this changes all of that.

The Investment

Sagicor has created a company that anyone can own a part of for as little as J$500 (J$5 per share for a 100 shares minimum, increasing in blocks of 100 shares after the first 100). They are projecting an 8% dividend yield (your expected return). The plan is to pay dividends twice per year, 85% of cash yielded from the portfolio (which is how they get the 8% return), and the Jewel properties which are almost 90% of the portfolio are projected to generate earnings in US$, providing a valuable currency hedge for investors.

The Sagicor X Fund Portfolio – Properties Owned

The properties included in the portfolio include the 3 Jewel properties, warehouse space in Kingston and Montego Bay, and others. The portfolio includes tourism, commercial and industrial properties, and they continue to look for other properties with good earning potential to add to the portfolio. The Jewel Runaway Bay Beach & Golf Resort is valued at J$3.0 billion and has gross annual income of J$537 million (US$5,424,000) for FY2012 with a 50% occupancy level. The 12 properties held by the fund are valued in excess of J$12 billion.

IPO Details