Lakes Pen revaluation boosts Sygnus Real Estate Q3 results

Sygnus Real Estate Finance (SRF) benefited from a fair value gain on its Lakespen Development project in its third quarter (Q3) 2026 results, pushing net profit up nearly 193 per cent.

 

However, Jason Morris, co-founder and chief investment officer, Sygnus Capital, cautions shareholders that this one-off gain would not impact other periods.

 

During SRF’s July 16 earnings call, Morris explained that the $806.90 million gain was due to the commencement of construction and the subdivision of the property. As a result, net profit jumped to $444.29 million as at May 31, compared with $151.74 million in the previous year.

 

“There was one single large danger of this, that is that the Lakes Pen development had a favourable gain of $806.9 million recorded during the period. Typically, SRF does valuation at the end of the financial year. However, based on the fact that construction had started on Lakes Pen and once the construction started, because there are going to be lots that are being subdivided to be exited, then the accounting treatment for Lakes Pen changed, and with that change, we had to do a valuation of the asset at the date of effective commencement,” he disclosed.

 

He added that SRF will not conduct another valuation of the development until its completion, which is expected to be in summer 2027.

 

For the third quarter, SRF reported net investment income of $511.71 million versus $265.29 million from Q3 2025. Net profit attributable to shareholders rose to $444.28 at May 2026, up from $151.74 a year earlier.

 

For the nine-months period, however, net investment income fell by over 90 per cent to $105.08 million. The company reported a net loss attributable to shareholders of $45.71 million when compared to a net profit of $787 million during the comparative period.

 

With SRF now in a second life cycle of asset development, the company’s portfolio of assets comprised of mostly investment property and some real estate investment notes (REINs). The company also generated $2.8 million in cash from its exits.

 

“Of course, our job is to ensure that we exit the assets and crystallise cash and use that cash to pay dividends or make special distributions to shareholders, which is what we're trying to do in terms of trying to wrap up one deal not exit,” Morris shared.

 

In terms of REINS, the CIO expects SRF will increase its investments in that asset class due to ongoing negotiations.

 

With regards to ongoing developments, Senior Development Project Manager Janelle Worthing shared that the Mammee Bay project in St Ann is “making good progress”.

 

“Large hospitality developments do take considerable planning, investment and time. Notwithstanding that, we are comforted where we are in this process. And before long, not before long, we will be coming back to you or investors to share those plans on how it is that we intend to unlock value in this property here,” she said.

 

Adding to this, Morris revealed that SRF is in “advanced discussions with interested partners from overseas”. 

 

The company is also in the planning stage of another beachfront property — the Delphine in Newcort, Trelawny. 

 

Commenting on dividend, Morris noted that SRF is not in a position to give shareholders a timeline for the next payments “simply because our exits are a bit behind. So, once we catch up on that, then we'll be in a position to have the cash to deploy the dividends, versus redeploying the cash into projects that we now have.”

- JS