Business

Investing in Jamaica inspite of the red tape

Red tape sets back Sagicor hotel water park by six months

BY STEVEN JACKSON

Friday, March 28, 2014    

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SAGICOR Life Jamaica Limited president and CEO Richard Byles wants faster planning approval following the near half-a-year wait for permission to build a waterpark at a hotel owned by the conglomerate.

He still urges the private sector to invest despite red tape. The park, which aims to start construction in June will form part of its Runaway Bay-based Jewel hotel.

"It took us five months to get approval done and we have it and we are going to start the water park," he told the media at the Sagicor head office earlier this week. "It is going to get us better rates at the hotel. Those better rates are going to be good for the hotel, our pension clients, people who work with us, and the country. Do I wish I could get the approval in 30 days for a waterpark. Yes, I would but I am not going to throw my hands up and not invest."

The conglomerate received an environmental permit with stipulated conditions from the National Environment and Planning Agency (NEPA) earlier this year and hopes to complete construction of the park next year.

Roughly US$5 million will finance the construction of the park from the $1.5 billion raised from the initial public offering of the Sagicor Real Estate X Fund which trades on the Jamaica Stock Exchange (JSE). The remaining proceeds will enable Sagicor to quickly take advantage of investment opportunities.

"We have made investments over the past year and we have encountered bureaucratic problems. But the opportunities that the investments provide to us are sufficient to endure the bureaucracy. It's not going to stop me from investing," Byles added.

The X Fund's holdings are primarily comprised of tourism, industrial/warehouse and office/retail properties.

Jewel Runaway Bay is projected to make US$4.8 million profit in 2017 on projected revenues of US$21.2 million, Sagicor said in its prospectus last year.

Sagicor X Fund's prospectus estimated that net income from its three hotel properties, which include Jewel Dunn's River Beach Resort and Spa and Jewel Paradise Cove in St Ann,would grow from US$2.6 million in 2012 to US$15 million in 2017.

In 2017, the three hotels are projected to earn US$14.6 million in net profit from US$59.4 million in revenues.

Comparatively, Sagicor Jamaica earned some $5.9 billion (roughly US$59 million) in its 2012-year end on $19.5 billion in revenues.

Other properties are the R Danny Williams building in New Kingston; Sagicor Industrial Park Norman Road; Sagicor Industrial Park Freeport; Sagicor Industrial Park Marcus Garvey Drive; Sagicor Montego Bay Commercial Centre; the Sagicor Sigma building on Knutsford Boulevard, New Kingston; 78A Hagley Park Road, Kingston; Spanish Town Shopping Centre; and a vacant lot on Seymour Avenue in Kingston.

Jewel Runaway Bay -- a 266-room hotel -- was purchased in June 2012 by Sagicor Sigma acting through the Sigma Real Estate Portfolio. The property, a low-rise beachfront resort was first opened in 1962. In 1977 it was purchased by the Government, acting through National Hotel and Properties Ltd.

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