JAMAICAN Teas Limited is exiting the real estate market after more than a decade in the sector, as the company pivots its strategy toward strengthening manufacturing operations and expanding its investment arm, QWI Investments Limited.

The company will sell off its remaining property assets, beginning with the final 12 units of its 30-unit Belvedere apartment project. According to CEO John Mahfood, the development has taken longer than expected to sell despite relatively attractive pricing. The one-bedroom apartments, priced at about $30 million, have generated little profit for the company.

“We are selling relatively close to cost; we aren’t making any money,” Mahfood said during the investor briefing.

The company plans to divest its remaining real estate holdings as part of the broader strategic shift.

“We will sell off other real estate that we had for investment and focus more on what we’re doing in the manufacturing and QWI,” he said.

Mahfood said the company would consider acquiring another manufacturing business if an opportunity arises as part of its expansion strategy.

The decision comes even as Jamaican Teas recorded improved performance in its real estate segment for the first quarter, with real estate and rental income rising to $86 million from $57 million a year earlier. However, Mahfood said the move was not driven by competition but by the company’s position within the industry.

“You either have to be a small entrepreneur doing small projects of 10 or 15 units, or you have to do it really big, and we weren’t in either, and we just felt like it diverted the attention of the company,” he explained.

Mahfood also pointed to structural challenges associated with delivering low-income housing in Jamaica, noting that such developments require significant long-term investment and complex logistics while offering smaller returns than large-scale projects. He was also critical of the role of the National Housing Trust (NHT) in addressing affordable housing needs.

“The NHT is just taking in all this money; they don’t know what to do with it, so the Government says, ‘Let me take it’,” said Mahfood. “It’s very unfortunate, and it’s not just related to this [political] party, but NHT is underutilised.”

He also highlighted the impact of taxes on construction costs in Jamaica, noting that duties and General Consumption Tax on imported construction materials ultimately raise the cost of housing.

“That’s 35 per cent that goes into building a house that should not be there, and the Government just won’t do anything about that,” he said.

Approval timelines were also cited as a major obstacle for developers, with projects taking between two and three years to receive the necessary approvals.

Jamaican Teas expects its full exit from real estate to generate about $360 million in revenues. Combined with an existing $400 million cash reserve, the capital released from the divestment is expected to strengthen the company’s balance sheet and position it to pursue mergers and acquisitions.

The funds will also support capital expenditure aimed at upgrading manufacturing equipment and sourcing inputs from alternative markets to reduce production costs.

Referencing the 15 per cent tariffs imposed by the United States on Jamaican goods, Mahfood said companies should consider diversifying their sourcing strategies.

“Every Jamaican company needs to source elsewhere than the US. They must go to China, and they must go to the Far East, because the prices are a lot less. We are going to get our costs down by re-sourcing,” he said.

Despite the strategic pivot, Jamaican Teas reported weaker financial performance in the most recent quarter. Total revenues fell four per cent to $876 million from $913 million a year earlier, resulting in a net loss of $21.6 million.

The decline was largely linked to disruptions affecting the company’s export manufacturing business rather than its real estate operations.

Export manufacturing sales fell by $100 million year-over-year following two major setbacks. A fire at the company’s United States distributor halted sales between June and December, while tariffs introduced in the US made products sold under contract less competitive. By July, the distributor had accumulated about 12 months of inventory and suspended new orders.

Mahfood said sales in Jamaica and the wider Caribbean remained strong, but those gains were not enough to offset the export disruptions during the quarter.

Conditions have since begun improving as inventory levels decline and production resumes for those customers, although results have not yet returned to expected levels.

“My expectation is that the manufacturing business will make about $80 million in the second quarter as opposed to $20 million in the first,” he said.

Mahfood also said the company hopes improved stock market conditions could generate gains through its investment arm, QWI.

The Caribbean remains Jamaican Teas’ largest market, accounting for more than half of revenues and surpassing the domestic Jamaican market. Mahfood described the regional business as stable and growing, noting that geographic diversification helps protect the company when one segment faces challenges.

“If you focus on the Caribbean, you can grow,” he said.

With US tariffs expected to make exporting to that market more difficult, Jamaican Teas is prioritising growth in Jamaica and across the Caribbean. The company has also appointed a new distributor in Canada, where sales are increasing.

As part of its diversification strategy, the company is exploring new markets including the French Caribbean islands, Aruba, Curaçao, Ghana and Nigeria as it seeks to broaden its export base.

Belvedere apartments: Jamaican Teas says sales of units at its Belvedere development have been slower than expected, despite relatively attractive pricing.

Jamaican Teas says it will divest its remaining real estate assets as it pivots toward manufacturing and its investment arm.

Belvedere apartments: The development forms part of Jamaican Teas’ real estate portfolio, which the company is now divesting.

MAHFOOD…we are selling relatively close to cost; we aren’t making any money.