FirstRock Group is facing turbulent times as a wave of high-level resignations, financial challenges, and project delays threaten to shake the foundation of the real estate investment firm. With growing concerns surrounding the group’s premier projects, including the Hambani Estates development, the company’s stability appears increasingly precarious.
Mass Exodus of Leadership
Over the past four months, eight employees, including senior figures such as Denroy Pusey and Sable-Joy McLaren, have parted ways with FirstRock Group. Pusey, who served as Head of Real Estate Business, saw his role made redundant in November—a move that shocked industry insiders. McLaren, the Senior Manager for Group Marketing, exited in October, alongside others who have quietly updated their LinkedIn profiles.
Adding to the uncertainty, a job listing for Group Legal and Compliance Manager appeared on LinkedIn in late November, suggesting further cracks in the company’s leadership structure. This position, previously held by Courtnie Brady, remains a critical vacancy.
Hambani Estates: A Beleaguered Flagship
FirstRock Real Estate’s Hambani Estates project, located at 1-3 Bamboo Avenue in St. Andrew, Jamaica, was once envisioned as a symbol of luxury and success. However, delays and financial setbacks have overshadowed its promise. Originally scheduled for completion between April and June 2023, the project has been pushed to early 2025, with only one unit sold to date.
The financial strain is significant: Hambani Estates represents a third of FirstRock Real Estate’s balance sheet, and the company has had to negotiate a one-year repayment extension with Sagicor Bank for its US$10 million loan. Adding to the woes, Sagicor Bank holds an unlimited corporate guarantee on the loan, amplifying the risks for FirstRock.
A String of Setbacks
FirstRock’s troubles extend beyond Hambani Estates. The National Environmental and Planning Agency (NEPA) recently rejected the company’s application for a commercial development at 5 Seaview Avenue, a property that had been cleared more than two years ago without prior approval. Financial losses have compounded the issue, with the sale of several properties—such as 2 Retreat Avenue and 21 Balmoral Avenue—yielding net losses rather than much-needed gains.
Seeking Stability Through Divestment
Amidst the turmoil, FirstRock Real Estate has pivoted its strategy, focusing on property divestments and ventures outside Jamaica. In 2023, the company sold five apartment units in Costa Rica and finalized a 20-year lease for two KFC locations in the region. Additionally, it acquired a majority stake in the Crown Square Commercial complex in the Cayman Islands for $1.7 billion.
These moves represent FirstRock’s efforts to stabilize its finances, which have been under pressure due to a 58% drop in net operating income and a swing from a net profit of US$957,695 to a net loss of US$1.45 million as of September 2024.
Investor Confidence Erodes
The challenges have taken a toll on investor confidence. FirstRock Real Estate’s stock, initially listed at US$0.12 in 2020, has plummeted to US$0.024—a staggering decline of up to 80% for early investors, including notable entities like NMIA Airports Limited. The company’s shrinking balance sheet, down 9% to US$57.25 million, underscores the precarious financial position.
Litigation Looms
Adding to its woes, FirstRock Group is embroiled in legal battles, including a case against former Head of Real Estate Pierre Shirley, who allegedly owes $32.62 million under a staff loan agreement. The outcome of this case, which was recently heard in court, could have further implications for the company’s financial stability.
Looking Ahead
While FirstRock’s foray into other Caribbean and Latin American markets offers a glimmer of hope, questions remain about its ability to recover from its current challenges. With major leadership gaps, financial setbacks, and unresolved litigation, the road ahead is fraught with uncertainty. Investors and industry observers will be watching closely to see if the company can navigate these turbulent waters or if the storm will prove too much for FirstRock Group to withstand.
