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HAVANA-In a $20-million deal exemplifying the expanding global reach of commercial real estate, a Middle Eastern company has acquired a 46% stake in a Canadian company focused on creating resort properties in Cuba. The infusion from Dubai-based Profile Investments LLC will assist implementation of the company's platform in Cuba, according to Walter Berukoff, executive chairman of Leisure Canada.
"All of the elements are now in place to accelerate development of our world-class asset base in Cuba and become that nation's premier hospitality and real estate development company," says Berukoff in revealing the commitment. Profile's vertically integrated operation should enhance that effort, adds Berukoff, whose firm is traded on the Toronto Stock Exchange.
The president of Profile Investments' parent firm, the Profile Group, expresses similar optimism about the partnership. Profile is already active in such areas as Cape Verde, North Africa and the Persian Gulf, notes Hanif Patel, and the union with Leisure Canada will give entry to the Caribbean for some 30,000 Profile investment clients. Profile, says Patel, "is extremely excited about potential co-operation and synergies which will arise from this investment."
Under terms of the bifurcated agreement, Leisure will issue approximately 60 million shares and half-warrant units to Profile at 25 cents each, providing enough to raise nearly $15 million. Also, Profile and its affiliates have agreed to put another $5 million into Leisure Canada's operating subsidiary, Wilton Properties Ltd. The transaction is slated to close by the end of February.
Leisure Canada is pursuing a variety of ventures in Cuba, with multiple properties that include five-star hotels and a total room count of 4,200, as well as PGA championship golf courses. Having a presence on the island nation for more than a decade has helped Leisure Canada position itself ahead of other competitors, according to company officials who are betting future growth on the assumption that relations will ultimately normalize between the US and Canada. The company anticipates travel from the US would quadruple over a quick time frame should that happen, citing the allure of Cuba's 300 beaches and close proximity to the US.
Among the ventures being pursued in Cuba is Monte Barreto, a two-acre property in Havana located across from the city's new trade and convention center and a modern aquarium. Leisure Canada is also developing a property 70 miles east of Havana that is being promoted as the country's first high-end destination resort, and also controls a small island just south of the main island on which it plans 900 hotel rooms and a variety of amenities and retail offerings.
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