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Sagicor X Fund hotels generate $5.5b revenue

Published:Sunday | March 20, 2016 | 12:00 AMTameka Gordon
Rohan Miller, CEO of Sagicor Real Estate X Fund and chief investment officer for Sagicor Jamaica.

Sagicor Real Estate X Fund's hotel portfolio generated more than $5 billion of revenue for the company in 2015 amid signals that the out-turn will be even better this year when the business from its latest acquisition is fully factored into its accounts.

The DoubleTree convention hotel in Orlando, Florida, was purchased by Sagicor X Fund last September.

Overall, the company achieved revenue of $6.6 billion, split between the hotel portfolio at $5.56 billion and returns on its investments at over $1 billion.

The company offered no guidance on its revenue projections, but said FY 2016 would "reflect a full year's performance for the DoubleTree, which we acquired in September 2015, as well as improved performance from the newly renovated properties - Jewel Runaway Bay, Jewel Paradise Cove, and Hilton Rose Hall".

The Jewel resorts are owned by another Sagicor Group entity - the Sigma Real Estate Portfolio.

Sagicor X Fund, which listed as a start-up on the Jamaica Stock Exchange, had just $963 million of revenue in its first year of operation, 2014, all from its investments, and all but $41 million of which flowed to the company's bottom line. In 2015, the company racked up more than $4 billion of expenses and made a net profit of $1.3 billion.

X Fund is invested in hotels and related entity Sigma Real Estate Portfolio, which in turn is invested in three Jewel-branded hotels as well as commercial property.

Alongside its purchase of Double Tree in Orlando, Sagicor X Fund also acquired the Hilton Rose Hall Resort and Spa in Montego Bay in January 2015, in separate deals with former owner of the properties, Blackstone Group.

Turnover from Hilton Rose Hall totalled $4.58 billion for the year, which suggests that DoubleTree would have generated around $1 billion of revenue in the concluding quarter of 2015.

With the acquisitions, which were largely financed by debt, X Fund's combined property and financial assets have grown from $9 billion to $30 billion, but its borrowings have also shot up from $4.8 billion to $17 billion, some $5.4 billion of which becomes due in the short term.

Its fundraising last year included a US$46.75 million fixed rate mortgage note, a US$51 million loan, and a $5.2 billion rights issue.

For the year ahead, Sagicor X Fund directors, Chairman Richard Byles and CEO Rohan Miller, said both X Fund and Sigma Real Estate Portfolio continue to actively seek viable investments in tourism and commercial real estate.

The company has set aside at least $1.6 billion of cash for the upgrade of the DoubleTree property.