Sale of BET property in Wildey to AUB a positive move for Fortress Property Fund
The sale of the 10-acre commercial site in Wildey which houses the BET buildings to Era Educational Services DMCC, operators of the American University of Barbados (AUB), School of Medicine will augur well for shareholders of the Fortress Caribbean Property Fund.
Describing the sale as “significant”, Mr. Cave noted that the Property Fund and its shareholders stand to benefit. “The sale affords the Fund a high level of flexibility as it provides immediate cash resources to reinvest in long-term, revenue-generating real estate assets consistent with the Property Fund’s mandate. This flexibility is a positive move for the Fund and we were pleased to accept the offer from a qualified buyer based on this,” he explained.
The sale, completed at a gross price of BBD $16.5 million, was announced yesterday during a media conference addressed by Minister of Education, Ronald Jones; Chairman of the Property Fund, Sir Geoffrey Cave; and officials of AUB.
While the sale price is below the carrying value and will result in a net loss of BBD $2.3 million to the Property Fund, it reflects the assumption of a loss of rental income as well as the significant costs that would have been incurred going forward for redevelopment to prepare the property for new tenants.
Mr. Cave had previously noted that the site had been a tremendous asset in the Property Fund’s portfolio, generating healthy returns from rental income over the past 14 years.
The property was vacated by Flow (formerly BET) at the end of October 2015. The northern part of the property houses several buildings and parking areas, while the southern part includes cricket grounds and tennis courts.
The Fortress Caribbean Property Fund Limited SCC is a Barbados-based closed-end mutual fund. It is comprised of two segregated cells (“funds“), each pursuing its own independent investment objectives. The Fund invests in real estate properties in the Caribbean and internationally and offers investors the opportunity to earn income and/or long term capital gains from a portfolio of properties.