GK investments to create BPO space at central sorting office
GK Investments Limited has inked a deal with the Postal Corporation of Jamaica to transform a leased section on the Central Sorting Office (CSO) in Kingston into rental space aimed at the business process outsourcing (BPO) sector.
The GraceKennedy Limited subsidiary will lease some 59,000 square feet of the second floor of the building and will have the right to sublease the space to third parties.
The space has the potential to open up into 200,000 square feet, with the potential to create between 500 and 4,000 jobs, GK Investments Managing Director Steven Whittingham said.
"The design stage has already begun and physical work will start as early as January," he said, adding that the complex should be completed by June 2016.
"Our goal is to make this the leading BPO facility in Kingston, and the preferred place of choice for employers and employees in the BPO sector," said Whittingham, noting that 500 seats will be available initially.
In addition to housing BPO operations, the space will also include skills-training facilities that are expected to supply the BPO sector with the requisite talents, Whittingham said.
The complex will also have several amenities for the employees, including childcare and after-school programmes, restaurants, and a library for those employees "who are also students," the company said.
Whittingham declined comment on the level of investment going into the project, saying only that "it will be significant".
Still under evaluation
The investment cost will also be determined by the specifics of the layout required by the BPO occupants, he said.
"We are still evaluating the level of works that will be done to the exterior ... and have not finalised the specifications of the technology infrastructure that will be installed," he said.
The project is expected to (meet) GK Investments' return on equity minimum threshold of 20 per cent.
"We have taken what we believe is a calculated risk to take space that has been previously unused and develop it. So we are expecting fair return on investment," Whittingham said.
GK Investments will create the infrastructure and the tenants will complete the customisation according to their respective needs, he said.
The project marks the first real estate and BPO investment for the company, which also offers financial services.
"GK Investments also has credit instruments as a part of its investment portfolio, so we are financing some of these expansions," Whittingham said of the other services the company will offer to its clients.
"For at least one of our partners in the space, we will finance their equipment (and) the set up of the space," he said, noting that the venture was not purely a real estate holding.
GK Investments has so far confirmed two tenants, the managing director told the Financial Gleaner, but declined to identify them.
The GraceKennedy subsidiary joins telecommunications firm FLOW, which earlier this year announced the relocation of its call centre from El Salvador to the sorting office.