Susan Gordon, Business Reporter

Property at 1A Olivier Road that Scotia Group plans to transform into a residential complex. - File

Scotia Group Jamaica is about to venture into real estate development with the planned transformation of a 12-acre property located in a high-end neighbourhood in St Andrew, into residential housing.

But the bank is keeping mum on the details of the investment, saying only it would be financed through the pension fund, but construction sources say the property could accommodate as many as 120 housing units.

Scotiabank last year acquired the 1A Olivier Road property - home to the American International School of Kingston (AISK) - at which time it was expected that it would become a new branch of the island's top bank.

At the time that property was on the market, Wednesday Business was advised by then owner St Andrew Hotels, a company owned by members of the Issa family, that the asking price was US$1 million per acre or a total of US$12 million (J$780 million) for the entire acreage.

The actual selling price was not disclosed.

Residential homes

Scotiabank president William 'Bill' Clarke, who is also chairman of the board of trustees for the BNS superannuation scheme, now tells Wednesday Business that the site is to be developed into residential homes.

Wednesday Business learned from two sources within the bank that the project would be financed from pension funds.

The bank declined to say more.

"We are still in the very early stages of development for this project, and would therefore prefer not to go to press at this time," came the response from the offices of Anya Schnoor, a senior vice president of Scotiabank and chief executive officer of Scotia DBG Investments, when asked about the project and how it would boost business for Scotia Jamaica Building Society, a group subsidiary.

But former president of the Land Surveyors Association of Jamaica Glendon Newsome estimates that a flat land property measuring 12 acres could accommodate an average of about 10 houses per acre before roads and other green areas are allotted.

The Financial Services Commission, which monitors the private pensions industry, says real estate projects are acceptable means of investing pension assets, as long as the investment is properly secured and transparent, the aggregate invested does not exceed five per cent of the amount in the pension plan, is income generating one and becomes an asset to the fund.

AISK continues to operate at the property, but will be relocating to lands leased from Jamaica College.

susan.gordon@gleanerjm.com