KLE Group on the hunt for second development property
Buoyed by the oversubscription for its Bessa resort vacation units, real estate and entertainment company KLE Group is on the hunt for a second development property in St Mary. KLE Chairman David Shirley said Thursday that the company has already...
Buoyed by the oversubscription for its Bessa resort vacation units, real estate and entertainment company KLE Group is on the hunt for a second development property in St Mary.
KLE Chairman David Shirley said Thursday that the company has already identified potential properties for similar development in the parish, but is yet to pick one.
“We haven’t started any negotiations yet, but that’s the next move for us,” Shirley said.
Construction of the Bessa resort, located in Oracabessa, has been ongoing since 2018, and is now said to be 85 per cent completed. It comprises 86 vacation properties priced between US$260,000 and US$795,000.
KLE said it has received more than 200 applications for the units from local and international buyers, and that it expects to complete the development by next March. The cash generated from unit sales will help to fund future projects, the company said.
KLE holds a minority stake in Bessa, but is the overseer of the project. Sagicor Life Jamaica holds majority interest, and KLE intends to pursue an expansion of their partnership for the second development.
“Sagicor is now doing their checks to ensure that the applicants qualify for the units, so we should be finalising sales by the end of the year,” Shirley said.
KLE Group, which was founded by Gary Matalon and partners, has gone through various reorganisations over the years as it sought to find a model that works for it. It began as a night club operator, then later refocused on casual dining – a market in which it remains as franchise operator of the Usain Bolt Tracks & Records restaurants. However, the restaurant operation has not grown at the pace the company needs to thrive, so it added another layer to the business in the form of real estate.
Now KLE is dually focused on property development and the Tracks and Records division as the path forward, a decision taken during the pandemic, which robbed the restaurant of business and kept the company in the red.
At half-year, January to June, KLE group reported losses of $40 million, while revenue dwindled to $73 million. Its third quarter results are pending.
Among the measures taken in the last reorganisation in November 2020 was the elimination of the position of CEO, which was held by Matalon, to save on costs; and the creation of two committees to oversee the restaurants and real estate divisions.
The current mid-year financial results indicate that KLE Group has more work to do on its turnaround.
The company is planning another round of restructuring, but Shirley said it wasn’t yet right time to release the details of an initiative that KLE has been working on since September.
“I really can’t say much at the time, but the board has made some decisions and we will be making some announcements shortly,” he said.
The restaurant division subcommittee is chaired by Matalon, while Shirley leads the real estate division. Most of KLE’s earnings come from the food and bar business, but it also earns small amounts from its merchandise and rental business.
To improve its restaurant earnings, KLE has amended its business model to add a delivery service, called Irie Courier. The company also utilises QuickPlate, 7Krave and Hugo for food deliveries.