PanJam to build hotel in Montego Bay
PANJAM INVESTMENT Limited acquired six acres of land for a hotel and shopping centre in Freeport, Montego Bay, one of a series of new investments being pursued by the property conglomerate.
The hotel, targeted at business travellers, will be developed on lands adjacent to the Montego Freeport Cruise Terminal. It would become PanJam’s first project in the resort city and its third hotel property to be developed in recent years in Jamaica.
PanJam previously telegraphed that it was searching for lands for a hotel but did not reveal the site until Thursday at its annual general meeting, where it also disclosed that the project included a retail centre.
Chairman and CEO Stephen Facey said the hotel would capitalise on the growth of international business in the parish of St James, particularly the BPO/call centre market and cruise ship visitors.
“All of the hotels are all-inclusive. So anybody on business that wants a bed to sleep at night but is spending the day outside the hotel, and also eating out, they have no product at a price that is appropriate,” Facey told shareholders from the Courtyard by Marriott hotel in New Kingston in which PanJam is a principal owner. Its second hotel is still a work in progress on the Kingston waterfront – the former Oceana Hotel.
The Freeport hotel is in the initial design and master plan phase. PanJam said that consultants it hired for the project are in agreement that there is demand for such a product in Montego Bay. The hotel will occupy one and a half acres of the Freeport site, while the other four and a half acres is for mixeduse space, including retail shops directed at the resort market.
“We think it will be a solid investment that will bear fruit for us in the future,” said Face,y who did not divulge the cost of acquiring the property when quizzed by the Financial Gleaner.
Meanwhile, PanJam Vice-President Joanna Banks updated shareholders on the Oceana Hotel project on Thursday, saying the top four of 12 floors will be developed into 36 residential apartments and penthouse. The six levels below will operate as a 150-180 room hotel, while the bottom two floors will house hotel amenities and space already occupied by the Accountant General’s Department as a tenant.
Facey said later that the downtown hotel would be
completed in 2019, and opened for business in 2020.
Despite these sizeable projects, the net earnings they generate are still expected to be dwarfed by returns from Sagicor Group Jamaica in which PanJam holds a 31.6 per cent stake. Investment income from Sagicor totalled $3.7 billion in 2017 or around 90 per cent of PanJam’s total income.
Facey indicated that the new developments being pursued by PanJam are aimed at reducing reliance on Sagicor earnings.
“We hope these investments over time that some of the smaller seeds that we have planted will likewise grow larger. We understand the challenge and continue to look for a solution. But it is a happy problem,” he said.
‘MAGNIFICENT TREE’
The earnings from Sagicor arose from small seedling investments that grew over decades to a “magnificent tree”, he added.
Other investments made by PanJam last year include the acquisition of a business complex at 8 Olivier Road, home to the European Commission’s Jamaican office. And, the conglomerate increased its stake from 25 per cent to 33 per cent in New Castle, the company that holds assets of sauce manufacturers Walkerswood and Busha Browne.
“Now there are three owners of the business, each with a one-third stake,” said Chief Operating Officer Paul Hanworth.
PanJam also holds a 20 per cent stake in Aloft, a business hotel in Miami, Florida, which began operating in 2017.
Last year, the conglomerate made a net profit of $4.19 billion, but that was $16 million lower than the previous year. The trajectory has held for the first quarter ending March 2018, with net profit down by nearly $7 million to $835 million. PanJam explained that the quarter was flat due to lower investment income, which was somewhat offset by higher property income and stronger share of results of associated companies, led by Sagicor.
Banks said PanJam will focus this year on building a new revenue stream from trading.
“That’s an actively managed portfolio and our focus is primarily on the Jamaican market,” she said about the portfolio, which will also include North American and Latin American investments.
PanJam is also exploring acquisition of an equity stake in Regus, an entity which offers office space rentals globally. Regus will open its first location in Jamaica this year on the PanJam building in New Kingston.