BAP Capital targets $175m for debut fund

The Caribbean & Latin America Real Estate Fund will focus on distressed opportunities and development with a primary focus on the Dominican Republic, Puerto Rico, Antigua and Barbuda.

BAP Capital has started fundraising for its debut Caribbean & Latin America (CLA) Real Estate Fund targeting $175 million, according to marketing documents obtained by PERE.

The firm has been active in Latin America since 1997 after spinning off from real estate consulting firm Terremark Realty.  BAP Capital has primarily been a development firm focused on emerging markets, until the launch of its debut private equity real estate vehicle.

BAP will contribute 5 percent of total commitments up to $7.5 million, the documents said.

The CLA fund will focus on for-sale housing from affordable properties to luxury resorts and distressed assets. The fund’s primary target will be the Dominican Republic, Puerto Rico, Antigua and Barbuda with no more that 60 percent of capital invested in a single country. The fund’s secondary target markets include Panama, Colombia and Costa Rica.

The region has strong demand coupled with a lack of competition and a scarcity of capital, according to BAP. There is also low leverage, large margins and significant pre-sales for real estate.

BAP tentatively plans to invest 55 percent of its capital in distressed opportunities requiring redevelopment or refurbishment in which the firm will reposition and upgrade under-utilised properties. The remainder of the capital will go towards development with a focus on affordable housing and waterfront property where infrastructure is available and all entitlements and permits are approved.