Sale of downtown Kingston properties moves UDC out of the red
The Urban Development Corporation (UDC) has divested four of the properties it owns in downtown Kingston in the past 11 months as the state entity continues its push for the redevelopment of the market district.
A fifth property in Portmore, St Catherine, has also been sold, giving the UDC just over $1 billion in revenue in the past year and putting it in a profitable position.
In 2012, the UDC had a net operating loss of nearly $500 million dollars and was facing tough questions about its future viability with its recurrent expenses being greater than its annual recurring revenue.
But according to the corporation's general manager, Desmond Malcolm, things have turned around at the entity.
"There was a period, some three years ago, when we were in not so good shape, but my new board and my people have, over the last three years, demonstrated prudent management to the point where we are now projecting a profit rather than a loss like three-and-a-half years ago ... we are seeing growth to the point now that we will now report that we are making an operating surplus," said Malcolm.
The properties that have been sold in the last 11 months include the Oceana Hotel, which was purchased by King Church Property Holdings Limited in February for a little under $400 million.
The Heart Trust/NTA and the Overseas Examinations Commission also spent a little over $100 million to acquire UDC-owned properties on Victoria Avenue, including the Machado complex.
GraceKennedy Properties Limited shelled out just under $70 million for Lot 21 in downtown Kingston, while the Jamintel Building was sold to the Transport Authority for $150 million.
In St Catherine, Portmore Marina Developments Limited spent a little shy of $337 million for the Forum Complex.
According to Malcolm, the proceeds of these sales were used mainly to reinvest, with the remainder going towards the corporation's expenses.
"The board has mandated, and which we follow, that 75 per cent of the revenue is supposed to be put back into development projects," Malcolm said.
"So if we sell it, we use it to either acquire or develop other land. Twenty-five per cent - we are allowed that to use to help with operating expenses, which includes security for those properties, insurance, and all those things."
Malcolm further highlighted that the UDC, which was established 47 years ago, is a self-financing entity expected to execute its mandate while being self-sufficient.
"It is a company that operates like a government itself," said Malcolm.
"We have to use what we were given in land to develop communities, roads, water systems, etc, for the benefit of the people. In doing so, we provide jobs, improve communities, and must make a profit to sustain ourselves," said Malcolm.