Carreras puts Twickenham Park complex on the market: Relocates to Kingston
Cigarette distributor Carreras Limited will relocate to its headquarters from St Catherine to Kingston by the second week of February to cut back on the cost of operating the plant, but it is also designed to return the company to the centre of action in the main business
district, according to managing director Marcus Steele.
The company is also looking to offload its Twickenham Park complex on the edge of Spanish Town, but Steele was mum on the asking price. The depot at the complex, which is one of eight nationwide, is also being relocated to Hagley Park Road in Kingston.
"We are currently in negotiation to sell it," Steele said of the Twickenham Park plant, where it once produced cigarettes. The company exited manufacturing in Jamaica a decade ago and now buys and supplies brands owned ultimately by its parent company.
Real estate sources told Wednesday Business last night that Carreras has found a buyer for the complex.
Carreras' fixed assets are being carried on its books at $204 million, but sellers of commercial property say the Twickenham complex would be valued far higher. It would likely be priced around $5,000 to $5,500 per square foot, said one broker.
Carreras' new corporate offices will be located at 13A Ripon Road, an 8,000-square foot property on the cusp of the New Kingston business district that the company has leased for the purpose, "because we have decided to come out of owning buildings", Steele said.
Twickenham Park is roughly 10 times the size of the new Ripon Road location, which allows the company to save on operating expenses, he said. Carreras' annual administrative, distribution and marketing expenses were about $2 billion in each of the last two years. The same expenses at half-year September 2014 had topped $1 billion. The expected savings were not disclosed.
Steele indicated that the relocation was long in planning.
"We have the space, but we don't need the space and we have been trying to relocate, but it's very difficult to find a property where we can integrate," he told Wednesday Business.
He said with the cessation of manufacturing at Twickenham Park in 2005, the company was left "maintaining land and factory space that we really don't need" but was necessary spend so as not to impair the value of the property.
"So it's really about trying to find a more appropriate size and location for us. It's very costly to operate empty spaces we don't need," the managing director said.
The company's staff is about 100, which is a tenth of the 1,000 workers employed before 2005.
Carreras, which is majority owned by British American Tobacco Plc, ranks among the top companies for profitmaking and dividend distribution. At financial yearend March 2014, the company reported profit of $4 billion; it paid dividend per share of $9.29 for calendar 2014, which amounted to $4.5 billion.
The Ripon Road office, where Carreras will relocate on February 9, is "very close to the business district, but not necessarily within the centre," said Steele, adding that the cigarette distributor was trying to "get closer to the action in the prime business area".
Steele said nothing else would change and that the company's business model remains intact.
Carreras' distribution model is divided into three regions served by eight depots, in Kingston and the metropolitan region, Manchester and surrounding parishes, and Montego Bay as the third.