By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BISX-listed fund yesterday revealed it is targeting $20m growth in total assets for 2025 after recently completing the acquisition of its third development property near Sandyport.

Michael Anderson, president of RF Bank Bank & Trust, the Bahamas Property Fund’s investment manager and administrator, told Tribune Business the latest $4.7m purchase will further diversity its real estate holdings and help achieve its long-held ambition of attaining $100m in total assets by next year.

Confirming that construction of the Fund’s $12m-$13m Carmichael Road warehouse is due to be completed before year-end, with the facility expected to start generating rental income from the 2026 first quarter onwards, he added that the plans for downtown Nassau’s Beaumont House - the third development property - are being “fine tuned” ahead of renovations set to start before 2025 closes.

The Fund’s just-released 2024 audited financial statements reveal it has already assembled close to $14m in financing to pursue its growth strategy. Of that sum, $5m was produced by a private placement of preference shares, and Mr Anderson told this newspaper that a further $15m in funding has been “lined up” through this form of debt securities.

He also disclosed that the Fund is eyeing “going back into the market” to raise new equity financing in the 2026 second half when Beaumont House’s redevelopment is close to completion. The RF Bank & Trust chief revealed that project’s all-in investment, including the acquisition cost, could hit between $20m-$30m and, at completion, amount to close to one-third of the Fund’s overall value.

“We actually closed on our third new property out west the other day,; the one just over the road from Sandyport, which we will be developing in the next year to 18 months or so,” Mr Anderson disclosed to Tribune Business. “We’re planning for another residential property, so we’ve been looking at what we’ve got in the buildings presently there.

“There are different types of houses, different pieces built over time. It’s not really an easy pick up and use it. We have to decide if there is anything we want to use and, if not, do we start all over again? It was sometimes rental, sometimes not. It was not seen as a successful development. It had struggled, and the owners did not want to put more money into it.”

Describing it as “a beach club property”, Mr Anderson said the Fund had acquired it based primarily on its location - opposite Sandyport in a high footfall, affluent area, and also overlooking New Providence’s north coast. “We’re looking at another residential opportunity similar to Beaumont House,” he confirmed of the Sandyport property.

“We’re at the starting point of what happens. When we bought it, we bought it with the intention of getting it on to the residential market. We need to decide what is the best model for the property? Is it town homes? Is it condos? There are different opportunities that we need to look at and decide what to do. We’ve literally just closed. We’ve been working on it for at least nine months.”

Mr Anderson said that, with property redevelopments typically taking between 18 months to two years to complete, it was likely that the Sandyport project may not be released on to the market until the end of 2027. But the Fund’s warehouse, located near the junction of Carmichael and Gladstone Roads, plus Beaumont House, are both expected to contribute to revenues and profits much earlier.

“We have three development properties now in progress,” the RF Bank & Trust president said. “We expect that Carmichael will be finished by the end of this year. That’s the warehouse property that we’re working on, and we’re making good progress.

“We had to fill in all 17 sink-holes on that property and build a retaining wall at the back. It takes a bit of time and money, but we’re on track and it will be ready for rental early next year. A $12m-$13m project will be completed by then.

“We also have the Beaumont House project. We’re fine tuning the architects’ plans, so we expect to move forward with that in the fourth quarter this year, and we have the beach club property near Sandyport that we will be starting on - possibly in the fourth quarter next year, but more likely the first quarter next year.”

Mr Anderson acknowledged that the shift into property development marks a departure from the Bahamas Property Fund’s original business model, which was to acquire existing real estate assets with an established tenant base that were immediately income-generating.

However, he asserted that the addition of development projects will both provide Bahamian investors with the chance to enjoy greater returns and enable the Fund to break out from two decades of static, low-to-no asset growth.

“We’ve been around $40m-$42m for the last 15 years or s,” Mr Anderson told Tribune Business of the Fund’s total assets. Now, having fully resumed expansion mode last year, its total assets increased by 31.7 percent year-over-year in 2024, hitting $57.72m as opposed to $43.817m at end-2023.

That increase was driven by the Fund’s new investment properties and projects, and he added: “What you see there in that $15m growth is the first significant growth for a number of years. We see this as the start of growth, not the end of growth, and this year we are looking to put another $20m on to that.

“By the end of this year, we hope to be somewhere around $70m in total assets in the Fund and growing to $100m in 2026. We have anticipated, and are planning, on that growth. This is based more or less on what we have got today. If we find other opportunities we may grow further and bigger than that. We have properties in mind.”

Confirming that the Fund is also eyeing shopping mall and retail plaza investments if they prove the right fit, Mr Anderson added: “We’re trying to create a diversified set of assets that generate better-than-traditional rental market returns because we will be developing properties.

“Buildings typically generate returns of 8-12 percent. If you’re trying to create alternative investments for investors, my sense is you’re trying to pop that rate of return into the 10-15 percent space, and the only way to do that is to get into additional development in that space.

“We’re trying to diversify beyond the traditional office space model, which for the last 20 years the Property Fund has largely been in. We know we need to get out of downtown and get into other types of space, and we’re happy to be in retail if we find the right opportunity.”

The Fund’s first three investments are the Bahamas Financial Centre on Charlotte Street in downtown Nassau; One Marina Drive on Paradise Island; and Providence House on East Hill Street, which is also home to RF Bank & Trust.

Its 2024 financial statements show that, besides the $5m preference share raise, the Fund has also obtained a $6m bridging loan from Royal Bank of Canada (RBC) that is secured on both the Bahamas Financial Centre and One Marina Drive, plus a $2.975m overdraft from RF Bank & Trust, its administrator.

“We have lined up $20m in preference share financing to support the ongoing build out,” Mr Anderson told Tribune Business. “We’ve only drawn down $5, so there’s $15m in addition to that. There’s additional financing as well. Depending on what comes up, we believe we can go back into the market and raise additional capital for the Property Fund.

“As we build and start to generate more income on those assets, we see the potential to go back and raise additional equity for the Fund, particularly if we’re going to develop and don’t need to pay capital back.” He added that any equity raise will likely take place in the 2026 second half, close to when Beaumont House is likely to be completed towards the end of that year or early 2027.

“I believe we can attract money in the equity space to come in and invest in that project,” Mr Anderson said. “Beaumont House is a big building and, if it’s a $2m-$30m investment, it could be around one-third of the Fund. It’s a major share of potential profit and income for the Fund.

“This is consistent with the plan we developed with the Board 18 months ago to restart the development of the Fund. We have not added much to it, and feel it’s the right time to invest in building out the Fund.”