Four years ago Ryan Reid and his business partner Dr Michael Banbury embarked on starting a company focused on real estate and private equity. Their pursuits would lead to starting FirstRock Capital Resource in Jamaica and then FirstRock Capital Holdings.
“The idea for FirstRock Capital was to focus largely on real estate investments — not a real estate investment trust, but a company which takes an entrepreneurial approach to the business of real estate,” Reid told Jamaica Observer in an interview.
“Effectively, how can we make money from real estate? It means we may acquire property for capital gains purposes, it may mean we do residential developments for sale or rental, or we may do commercial development for sale or rental, or we do real estate private credit, whatever it may be, but anything real estate — not a real estate investment trust that acquires real estate for rental income alone,” he added.
With aspirations to take a more expansive approach to the business of real estate, Reid and Banbury raised capital for FirstRock through a private placement and thereafter an initial public offer (IPO). The IPO was oversubscribed with 2,501 shareholders confirmed.
Together the fund-raisng initiatives totalled US$30 million.
“We also wanted to pursue opportunities in the private equity space so we created FirstRock Private Equity, whose focus is on medium-sized enterprises, where we go in, take a stake in, and look to extract value down the line. We also incorporated FirstRock Realty which is licensed to buy and sell properties on behalf of clients,” Reid shared.
Given the number of subsidiaries under the FirstRock Capital Holdings parent, the decision was taken at the company’s last annual general meeting, on June 2, 2022, to undertake a name change of FirstRock Capital Holdings. At the time, the board believed that it was necessary to clearly identify what each entity does by its name.
FirstRock Capital Holdings Limited changed its name to FirstRock Real Estate Investments Limited on the Jamaica Stock Exchange on July 26, 2022. However, the listing/trading symbol on the exchange will remain FirstRock JMD.
Speaking during the renaming ceremony, co-founder and director of FirstRock Real Estate Investments Limited, Dr Banbury explained the business decision leading to the company’s name change.
“The name change plays an important role in our corporate strategy as we clearly delineate our different business lines within the FirstRock Group of Companies,” he shared.
He added: “One thing will remain unchanged — the focus on our ultimate goal of delivering value to our shareholders … we are more than halfway to our corporate asset target of US$100 million in the first five years of operation. In fact, of our companies combined, we have hit US$75 million in assets to date.”
With respect to FirstRock Private Equity, which is a private company, Reid plans to grow that company to about US$25 million in assets over the next 12 months. At present, the company’s assets are valued in the “teens”.
“With respect to FirstRock Realty, we plan to expand the brokerage beyond the shores of Jamaica; we are primarily looking at Costa Rica and the Cayman Islands. The three companies together, we are at about US$75 million in assets,” the FirstRock Group chairman disclosed.
“These are markets that we like. We have a strong, strong presence in Costa Rica (it’s our second-largest market), and we are very known in Costa Rica, largely in San Jose. So just like in Jamaica you have some of the identifiable brands and companies, FirstRock LATAM is largely known within Costa Rica so we have a strong presence there, so it makes sense for us to leverage that there. Brokerages are a little limited down there so we’re taking the opportunities. Cayman is just next door and we plan to have a strong presence within the real estate business in Cayman is short order,” he continued.
Reid also noted that the expansion of FirstRock Realty in the Caribbean and Latin America will fuel the company’s geographic diversification plan.
“For our company, the driver for that has always been diversification, so we see jurisdictional diversification as the main tool in our risk-mitigation strategy,” he said as he indicated he wants to take advantage of how the different economies are structured.
“The truth of the matter is, the pandemic has shown us the importance of jurisdictional diversification. How Jamaica responded to the pandemic was different from how Costa Rica responded which was also different from how the Cayman Islands responded, and so on. And so, whilst there may be shocks in one economy then liquidity in another, has been able to sort of, neutralise your risk exposure,” Reid added.
He argued further that local companies are recognising that there are opportunities which largely exist outside the country. Moreover, he pointed out that Jamaican companies are benefitng from the global popularity of the Jamaica Stock Exchange, due to its performance.
“I think the profile of Jamaican companies are being veiwed differently across the region. Jamaican companies are getting a lot more respect regionally. When we go to countries like Costa Rica, Cayman or even the Dominican Republic, persons are coming to the table now — and I think the stock exchange has a lot to do with that,” he opined.
So what does the future hold for the company locally?
“We have a few development opportunities on the real estate side, largely in St Andrew and St Thomas. We plan on rolling them out between now and the middle of next year,” Reid stated.
“In St Thomas we are doing a luxury development, which is going to be the first of its kind in the parish. It’s a development which is running parallel to the Government’s development agenda for the parish so we are very excited about that.
He, however, declined commenting on “two developments that are in the works” for the capital because they have not been finalised, but said “once they go through, the investment will be north of $4 billion”.