Buyer sought for Tucker’s Point
The Tucker’s Point Hotel and Resort is up for sale.
After being in receivership for some 16 months, the East End property is being marketed to potential buyers by international agency Jones Lang LaSalle and by Rego Sotheby’s International Realty in Bermuda.
The resort employs between 200 and 300 people — depending on the season — and receivers EY Bermuda say they are “seeking suitable investors to ensure the long-term success and sustainability” of the property.
EY partner Roy Bailey, who is overseeing the receivership, said the decision to actively market the property was due to the business being in better shape and prevailing market conditions.
He told The Royal Gazette that the claims against resort owners Bermuda Properties Ltd (BPL) by the secured creditors — HSBC, Argus and BF&M — totalled around $150 million, plus interest on the loans for the receivership period. Only sale proceeds over and above their claims will be available for unsecured creditors.
The property comprises the 88-room hotel with golf course, 50 unsold fractional ownership units — seven of those units are contracted but sales not completed — and undeveloped land, which has potential for building more units, planners permitting.
The receivers have not attached an asking price to the property but expect “a competitive, open-market process”.
Mr Bailey said it was in the interest of all interested parties — creditors, employees, Government and the people of Bermuda — that the hotel was “sustainable and successful in future years”.
This partly depended on the buyer understanding Bermuda and its tourism being more seasonal than that of Caribbean islands, Mr Bailey said.
“We wanted this to be a resort that pays its own way,” Mr Bailey said. “It’s been a 16-month period of receivership and we believe we have improved the resort. The membership numbers have increased 15 per cent in that time.”
Without providing figures, he said the performance of the resort had been flat last year compared to the year before. But he added that this was viewed as positive, given the unusually wet August and two hurricanes in October, which had caused bookings to be cancelled and stays to be cut short.
Mr Bailey added that the decision to sell now was also driven by improving market conditions for resort investment, particularly with last December’s announcement that Bermuda will host the 2017 America’s Cup.
“We do recognise that an investor coming in will want the resort to leverage the opportunity of this major event,” Mr Bailey said.
Delaying the sale until 2016 would have cut across the period of opportunity with America’s Cup-related activities starting this year in the run-up to the big event.
“Decisions are being taken now and requests for block bookings for two years’ time are already being made,” he added.
The resort, managed by Rosewood, opened in 2009, just as the Island and its main tourist market, the US, lurched into an economic slump.
This newspaper revealed that BPL lost more than $1 million per month from the start of 2009 through the end of August 2010.
In 2011, the company fought a heated public battle for a special development order (SDO) to expand and build dozens more luxury homes on the property that it said would be sold to help repay its debts.
Mr Bailey said the actual number of units that a new owner could build on the undeveloped area of the property depended partly on the result of environmental impact surveys and then the plans would have to go through the normal planning process.
Jones Lang LaSalle is marketing Tucker’s Point globally and the receivers expect no shortage of bidders.
Mr Bailey said the buyer was likely to fit one of four descriptions: financial, private equity, brand hotel name or wealthy individual.
“Because it’s Bermuda and it’s a unique resort and a unique opportunity, I think there’s a fair chance that it could be a high net worth individual buyer,” Mr Bailey said.
Mr Bailey expected the sale would take about nine months to realise, unless an appropriate buyer emerges quickly with an attractive offer and a shorter timeline.
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