The Jamaica Pegasus, New Kingston. - Junior Dowie/Staff Photographer
FOR THE past 33 years, the 17-storey Jamaica Pegasus hotel, regarded as the capital's premier business hotel, has towered over the New Kingston skyline. The largest hotel in Kingston, with some 310 rooms and additional 40 rented out as suites, the Pegasus's real gem is the prime real estate that it sits on.
Based on a valuation done last March by Property Consultants Limited, the hotel's land - eight and a half acres - has a market value of $721.7 million, or roughly US$1.3 million per acre while the building is valued at $2.3 billion, bringing the total value of the property to just under $3.1 billion.
"I consider the Pegasus [and its land] to be the most valuable single piece of real estate in Kingston," hotelier John Issa told this newspaper in a previous interview. Last Monday, at the hotel's annual general meeting, Mr. Issa, who is also the hotel's chairman, repeated these assertions, saying the Pegasus "is a unique asset, and although for accounting purposes we get the valuation done every year it's really worth what someone will pay for it. It's probably the best laid out hotel in New Kingston, the only hotel in New Kingston with adequate parking."
Economist John Jackson believes that the hotel should maximise the potential that the land presents.
"Well, I think the opportunity exists for them to get more out of the building," he told Sunday Business. Jackson argues, "The parking area is wasted space. They can build on top of it and park underneath like how they do it in the States.
"They could also use the basement from time to time if they have a function. There are a number of things they could probably do, for example, they could have luxury apartments, which they could rent out long term or offices."
Issa acknowledges that hotel is the only one in New Kingston with land available for expansion "The land has a development potential. It's something that I have though about from time to time, but the board has never looked at it formal.
"But the site on which the hotel sits has a great deal of room for additional development. There is space for another structure, which would include offices, parking, residential units and so on."
REAL ESTATE GEM
Issa recently told shareholders at the hotel's annual general meeting that 'One things [the board] has talked about from time to time is exploiting our real estate, whether we could build over by the parking lot some kind of commercial building and apartment [complex] with sufficient parking."
And if the hotel decides on this, Jackson says that they could finance it through a combination of debt and equity. "It would suit them to finance [the expansion] through borrowing and a rights issue to existing shareholders."
