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Rebranded Palmyra to open for business by year end - X Fund profit plunges

Published:Monday | July 31, 2017 | 12:00 AMAvia Collinder
An artist's impression of condo complex Palmyra as it was originally designed.

Sagicor Real Estate X Fund Limited, the real estate investment company run by Sagicor Group, saw its half-year profit erode by 30 per cent, some of which was linked to ongoing spend on the renovation of new acquisition Palmyra.

Net profit fell to $785 million in the six-month period ending June compared to $1.124 billion the previous year.

However, X Fund notes that the largest gap relates to a one-off revaluation gain of more than half-billion dollars last year on a 26-acre property it owns called Cinnamon Beach. The rest related to higher interest charges over the period.

Sagicor X Fund, which co-owns Palmyra with other Sagicor Group-related entities, borrowed $3.66 billion last year to acquire, renovate and operate the Jewel Grande Montego Bay, formerly known as Palmyra Resorts. Its debt servicing charges climbed by $115 million at half-year as a result, to $731 million.

CEO Rohan Miller told Gleaner Business that the borrowings covered only a portion of the US$53 million price tag for Palmyra, and that the rest was funded from internal resources.

The Rose Hall-based property is slated to open for business in the final quarter of this year under management by Aimbridge Hospitality, joining other resorts under the Sagicor-owned Jewel brand Jewel Runaway Bay, Jewel Lagoon Waterpark, Jewel Paradise Cove and Jewel Dunn's River.

In October 2016, X Fund and other Sagicor-managed funds acquired 217 of the 277 residential units in the incomplete Palmyra condo complex and an adjoining power plant owned by Caribbean Green Power Systems Limited. Both properties were placed in receivership by their bankers for outstanding loans a debt that Palmyra developer Robert Trotta disputes and is fighting in court.

Sagicor X Fund's stake in the new Jewel Grande Montego Bay amounts to 15 per cent. Its portfolio of hotel properties includes two that it owns outright Hilton Rose Hall Resort & Spa in Montego Bay and DoubleTree Universal in Orlando, Florida.

At half-year, revenue from X Fund's hotel operations grew to $5.5 billion, up from $4.9 billion at June 2016. However, profit for the segment shrank from $614 million to $577 million, partly due to renovation costs for DoubleTree that wrapped up in the June quarter.

The group also holds a 43 per cent interest in the Sigma Portfolio, which has property investments in the three Jewel Resorts branded hotels; office/retail shopping buildings, industrial/warehousing properties; and land holdings slated for development.

The Sigma Portfolio's revenue rose to $4.79 billion, of which $4.15 billion was earned by the Jewel hotels. Its net income topped $1 billion.

Amid ongoing investment in renovations, Sagicor X Fund's capital expenditures amounted to $817 million at half-year, up from $568 million in the same period in 2016. Its assets topped $45 billion in June, up from $40 billion a year ago.