Loshusan now Hi-Lo's landlord
Published:Friday | July 16, 2010 | 12:00 AM
The Loshusan family, big players in the grocery market, has acquired a prime piece of real estate at Barbican square that houses a rival supermarket operation, Hi-Lo Food Stores, owned by GraceKennedy Limited.
But the food and financial conglomerate on Wednesday swatted aside reports that Hi-Lo had been ejected from the property, from which it has traded groceries since 2001.
"The property changed ownership two months ago," GraceKennedy's senior general manager for domestic business, Ryan Mack, told the Financial Gleaner. "We're already paying rent to the new owners."
Mack said the company has a longstanding lease on the property with options to renew. GraceKennedy's chief operating officer, Don Wehby, said later that the renewals are every five years, which is standard operating procedure in the grocery trade.
Mack also confirmed that the new landlord was the Loshusans.
The three-quarter-acre property, up to May, was owned by Hampton Services Limited - a 39-year-old company based in Kingston in which Jamaicans Clinton and Winston Wong have equal ownership of one share each, according to Companies Office records.
Well-placed real estate sources tell the Financial Gleaner that the Barbican property was sold by Hampton in a deal worth more than J$1 billion.
Top performer
Only the portion of the property housing Hi-Lo was sold. Wong, whose address is on Companies Office records as Houston, Texas, has plans to develop the adjoining portion, The Financial Gleaner has learned.
Hi-Lo Barbican, at 24,000 square feet, is the second largestand a top-performer in the 14-store chain, Mack said.
The supermarket does not own the space its stores occupy, a deliberate business model pursued by GraceKennedy, a food and financial-services conglomerate, so as not to tie up capital in long-term assets.
"We're in the supermarket business, we don't want to own real estate," Mack said. He acknowledged, however, that there is a downside when landlords opt to close out leases.
Hi-Lo, since last year, has been in expansion mode, but lost one of its locations after owner Tony Wong, who also runs a supermarket called General Foods, opted to expand his north coast grocery business into Kingston andreclaimed the 14,000 square feet of space at 135 Old Hope Road, inside Liguanea Plaza.
Wong owns the shopping plaza in partnership with four others.
Mack, however, said Hi-Lo knew for 10 years that it would have had to move eventually.
The company last year acquired grocery assets from another rival, SuperPlus Food Stores— an 18,000-square-foot Pavilion store in Kingston and the 26,000-square-foot Fairview store in Montego Bay — as that company liquidated holdings to pump cash into the operation. The deals did not cover real estate, Mack said.
Hi-Lo is currently outfitting a new store, its 15th, at Portmore Pines, St Catherine, at a cost of just over US$1 million (J$86 million) which it plans to open by yearend.
The expansion have positioned Hi-Lo at No 2 in the grocery market, ahead of SuperPlus, with about a dozen stores, and behind Progressive Grocers, a consortium in which the Loshusans have membership.
Loshusan Supermarket is also based in Barbican Square in line of sight of Hi-Lo.
Ken and Bruce Loshusan were said to be off the island when the Financial Gleaner sought comment.
"I am in no position to comment," said Ken's daughter, Melissa, after consultations with her father, who she said was not well, and could not speak to the long-term plans for the property.
Melissa's only comment on the acqusition price was to ask how the Financial Gleaner got the information.