Now is the best time for investors to take entrepreneurial risk in Jamaica, which is ripe for investment with stable assets and 18 quarters of consecutive economic growth.
That's the word from president and co-founder of First Rock Capital Holdings Ryan Reid, who is encouraging investors to gather their capital and invest in Jamaica.
Addressing the Rotary Club of New Kingston at their weekly meeting on Friday, Reid advanced the point that Jamaica is on fire for investment with consecutive quarterly growth and heavy foreign direct investment (FDI), which have set the platform for investors to plough their resources in Jamaica.
“So, it's just a rapid expansion and widening of economic activity that we are seeing taking place, and I believe that now is the time to take some serious risks in this country. There is no tradable fixed income asset from where we are seeing that outweighs the benefits of exploiting private equity opportunities and real estate opportunities.”
According to Reid, “…the platform is there for us to take some risks, we need to take some risks, entreprenurial risks and seize the opportunity that is out there with respect to capital. There is a lot of liquidity out there — go and get it. There is low-cost funding, some at no cost effectively — go and get it.”
RAPID INCREASE IN REAL ESTATE VALUES
Turning to real estate in Jamaica, Reid declared that what is taking place now is a rapid increase in value of properties. “I dare say that real estate prices in Jamaica are significantly undervalued when we look at our neighbours like Cayman and where the real estate prices there, it is unbelievable,” the First Rock founder and president remarked.
He argued that Jamaica has been slow to come to terms with real estate values in the country. However, he contended that with interest rates being so low, people with capital are looking for somewhere to invest their money — so the first stop is stable assets, of which real estate is a safe bet.
He gave a personal experience with First Rock, which earlier this year identified a property it wanted to purchase with a valuation of US$2 million, but the vendor decided to withdraw at the last minute.
“We were disappointed and now we understand that that said property is being sold for US$3.9 million on valuation in less than a year. It goes to show what's taking place within our local landscape, Reid reasoned.
With regard to private equity, Reid told New Kingston Rotarians that Jamaica is witnessing a rapid expansion in this area, with private equity companies like his, Sygnus, Proven Investments and Cornerstone investing in businesses, in contrast with commercial banks which have been hesitant to offer business loans.
He argued that banks seem to be quicker to offer car loans rather than business loans, hence the popularity of private equity companies.