Property targets new citizens
BY STEVEN JACKSON Business reporter firstname.lastname@example.org
Friday, July 03, 2015
THE Charles Ross-led Sterling Investments Ltd (SIL) — a listed company with pension funds as its largest shareholders — revealed plans to modestly invest in the Embassy Suites by Hilton presently under construction in the Eastern Caribbean.
The 226-suite hotel located in St Kitts & Nevis aims to open its doors in the first quarter of 2017.
“SIL will invest six per cent of its balance sheet in the venture,” stated Marian Ross a director in Sterling Asset Management, which manages SIL, in a phone interview yesterday.
The company will maintain a “modest” investment in the hotel located on the exclusive beachfront bay in that territory. SIL’s total assets increased by roughly 60 per cent from $491.7 million in December 2013 to $787.04 million in December 2014.
Citizenship by investment programme
“The units in the hotel are priced in United States dollars and are being sold to applicants of the island’s citizenship by investment programme,” stated SIL Chairman Derek Jones in his chairman’s message within the 2014 annual report released this week to the Jamaica Stock Exchange (JSE), adding that construction commenced in August 2014.
“The geopolitical crises and civil unrest in the Middle East, North Africa and the rising wealth in China have fuelled strong citizenship applications to the island. We anticipate that this investment will provide a boost to SIL’s overall return on equity in the medium term,” he stated in the report.
SIL describes itself as operating one of the highest net profit margins and lowest efficiency ratios of any company on the JSE, according to its 2014 annual report. The company earned profit of $58.6 million from total revenues of $96.7 million for its December 2014 year-end.
Last October, SIL listed its ordinary shares on the JSE. SIL primarily invests in overseas bonds that are traded on global capital markets. Its investments generate double-digit annual returns in US dollar terms.
“This reflects the purchase of additional securities funded by a capital raise conducted in December 2013. The proceeds of the capital raise were used to purchase US dollar-denominated fixed income securities that provided a sustainable source of hard currency income for the portfolio,” stated the management discussion and analysis section of the report.