First Rock Real Estate has unveiled its strategic move to reintroduce unsold units of the Hambani Estate townhouse development as it downplayed the softening of the ultra-luxury real estate market.
The project is 60 per cent presold, and the remaining units will be “put back on the market” in short order with a view to achieving 100 per cent sales within the next six to nine months, the company said in its financial report for the June quarter.
“Despite delays originating from the COVID-19 pandemic, Hambani Estates, the group’s flagship development project, is slated for completion by December of this year,” stated the company in the financial report.
Situated in an affluent St Andrew community, the 12 Hambani townhouses go for between US$1.8 million to just over US$2 million depending on the unit.
The real estate market has taken a hit in the luxury category. That’s due to the implied higher return on investment from the stable money market compared to real estate.
Interest rates began climbing in late 2021 and the policy rate increased from 0.5 per cent to seven per cent. It means that a luxury investor with US$1 million can earn between US$70,000 to US$100,000 a year from the money market.
During the June quarter of 2023, First Rock made a net profit of US$423,000 compared to US$2.4 million. It’s a similar slowdown in profit over six months with profit at US$627.8 million from US$4.6 million in 2022.
First Rock added that its second development project, Bonne Chance, a seven-story apartment complex located in the Kingston 5 area, is in the final stages of planning and is slated to commence construction in the third quarter of the financial year.
“There is solid interest from the market for this product,” said the company.
First Rock’s total assets tower at $62.6 billion and its capital totalled $36.8 billion at June 2023.