Regional real estate management company, Eppley Caribbean Property Fund, has announced a buy-back of its shares.

This will be done on the open market in Jamaica and Barbados, where the shares are currently traded. The move comes as the directors of the company contend that the shares are being traded way below their true value.

In a posting on the Jamaica Stock Exchange (JSE) yesterday, Eppley said the buy-back is taking place in accordance with its existing Share Buyback Policy, which was previously announced.

According to the posting from Eppley, ”the directors believe that the company’s shares are currently trading at a significant discount to the company’s fair value for which its Net Asset Value per Share is a proxy. The directors, therefore, believe that repurchasing shares would unlock significant value for the company’s shareholders.”

As such, Eppley has given notice of its intention to purchase shares on the open market from time to time using the company’s cash at a price below or equal to the Company’s Net Asset Value per Share ($48.64 per share as of September 30, 2019).

In accordance with the rules of the JSE on share repurchases, Eppley said any purchases will take place following the expiration of 21 days from this notification and will immediately provide the JSE with the details of any purchases.

With a number of acquisitions that took place in 2018 and 2019, Eppley Caribbean Property Fund experienced an about-turn in its financial performance for financial year 2018/19.

For the year ended September 30, 2019, the company recorded its most profitable performance since its inception in 2013 and experienced significant improvements in all key financial performance metrics.

The improved performance was due to enhanced operational efficiency, receiving a full year’s benefit of acquisitions in 2018 and the acquisition of prime commercial real estate in Jamaica and Barbados in 2019.

Whereas Eppley reported a loss of BD$739,328 in 2018, its financial statements for the year just ended showed profits of BD$4.05 million.

The real estate management company reported an over-1,000 per cent increase in total investment income, moving from BD$612,524 in 2018 to BD$7.16 million.

On the other hand, Eppley’s operating expenditure also increased, with foreign exchange loss being the largest portion. Operating expenditure reached BD$3.11 million, more than doubling the 2018 figure of BD$1.35 million.

The company’s cross-listing of shares, which took place on August 29 this year, was done after it successfully completed an issue of shares valuing $3 billion on the local stock exchange.

The proceeds of the share offer were used to make additional purchase of properties in Jamaica and Barbados.

Since the last quarter, however, Eppley has secured yet another property in Barbados — the 20,167-square-foot Hastings Office Centre, which houses global professional services firm KPMG.

Eppley acquired four properties in 2019, adding Jamaican and industrial assets to the portfolio for the first time. Included is Empire Shopping Centre, a retail and office complex located in the heart of Cross Roads in Kingston, spanning more than 37,000 square feet.

The property’s anchor tenant is Sampars, a supermarket chain owned and operated by Derrimon Trading, a publicly-listed distribution and retailing company. Other tenants include Island Grill, Sagicor and Access Financial Services.

“Empire Shopping Centre’s access to parking, high traffic and visibility along Half-Way-Tree Road makes it an especially desirable location for retailers. We believe that building comparable retail space in Cross Roads would cost significantly more than our purchase price, assuming a developer could even find any suitable land in the area,” the annual report stated.

The directors expect the property to continue to deliver strong operating cash flows and appreciation to the Value Fund for many years to come.

Other properties include Angels Industrial Estate, 227 Marcus Garvey Drive and Alamac Warehouse, a trio of industrial assets in Jamaica and Barbados.

Angels is a 120,000-squarefoot distribution facility in St Catherine, located close to major transportation links to Kingston, Portmore and the north coast of Jamaica.

Meanwhile, the property on 227 Marcus Garvey Drive is a 27,000-squarefoot manufacturing and warehouse facility located near the Port of Kingston. Alamac is a 39,000-square-foot distribution facility located in Fontabelle, Barbados, near the port of Barbados.