Fund Facts

Real estate as an investment
A typical real estate investment (other than undeveloped or “raw” land) offers a total return, which consists of both an income element and capital appreciation. A typical commercial rental property is similar in some respects to a bond investment in that net cash flows are fixed for lease terms and are based largely on current interest rates and the capital cost of property. The unique difference is that the income payments will usually be much higher than a bond because of the liquidity risk of the property and the fact that rental incomes normally will increase in value over time. These two unique characteristics make the returns on real estate closer to those of equities by offering potential for growth, whereas most bonds have a principal component that does not appreciate and a fixed coupon, which does not change with inflation.

The Investment Strategies
The Fortress Caribbean Property Fund SCC – Value Fund
The investments in this fund are directed towards properties which provide sound income and/or potential for long term capital appreciation. These include primarily office and retail space. The fund aims to maximise total return from these investments by acquiring them at reasonable prices, managing costs, and providing good value to long term tenants. It is expected that the Value Fund will pay out as a dividend a minimum of 75% of its available distributable profits.

The Fortress Caribbean Property Fund SCC – Development Fund
The investments in this fund have been directed towards land, villas and other development properties with potential for medium term capital appreciation. The properties do not typically produce income. The fund intends to realise value on its existing portfolio of properties and to return capital to shareholders. It is not expected that the fund will pay a regular dividend.

Taxation of the funds
The funds are not subject to corporation tax on the income or profits derived from their investments, provided they designate all of such income or profits arising in an income year to be income of the shareholders.

Capital gains
There is no capital gains tax in Barbados and therefore, capital gains realised by the funds are not subject to tax.

Dividends
The funds are exempt from tax in respect of dividends received from investments in companies located in countries within the Caribbean Community (CARICOM), which have ratified the CARICOM Double Taxation Agreement.

TAXATION OF SHAREHOLDERS

Property Transfer Tax and Stamp Duty
Investors in the Fund will be exempt from property transfer tax and stamp duty in respect of transfers of their shares in the Fund.

Dividends
Dividends paid by the Fund to individuals who are residents of Barbados will be subject to a final withholding tax of 12.5%. Dividends paid by the fund to a company that is resident in Barbados is not subject to taxation and those paid to a resident of a CARICOM territory which has signed the CARICOM Double Taxation Agreement are taxed at zero percent.

Residents of countries outside of CARICOM are subject to a 15% withholding tax.

Capital gains
There is no capital gains tax in Barbados.