Thu | Feb 20, 2020

FCJ offloading 58 properties

Published:Wednesday | July 18, 2018 | 12:00 AM
Lyttleton Shirley, chairman of Factories Corporation of Jamaica Limited.

State-owned Factories Corporation of Jamaica (FCJ), the largest holder of manufacturing space, is hunting deals for 58 properties that it plans to offload, comprising both developed and undeveloped properties, according to chairman Lyttleton 'Tanny' Shirley.

"This represents 15 per cent of FCJ properties," said Shirley, who told the Financial Gleaner that Cabinet had signed off on the sales.

"We conducted an assessment of our asset portfolio to identify non-performing assets. We also identified undeveloped assets such as land which does not fit our strategic direction," he said regarding the rationale for the disposals.

FCJ is investing instead in "integrated business complexes", which bring public and private entities together, and space for agro-processing, manufacturing and BPO, he added.

The full value of the properties being sold was not disclosed, but the FCJ chairman said 11 of them were projected to bring in $319 million. Those sales, he said, were currently being finalised.

"We urge both existing clients and interested persons and companies to contact FCJ in regards to their interests in purchasing any of the available properties," Shirley said.

Factories Corporation owns and manages 1.7 million square feet of rentable space and expects to construct an additional 1.5 million square feet of space over the next three to five years to meet the demand in the agro processing, manufacturing, business outsourcing, distribution and warehousing industries.

For fiscal year 2017/18, Factories Corporation earned rental income of $732.56 million, which was $26.66 million or 3.8 per cent more than the previous year's $705.95 million.

The projected rental income for this year is $755 million, an estimate based on higher occupancy rates and contractual increases, Shirley said.

He did not disclose the lease or rental rates quoted by FCJ to clients, but said the rates are set "to aid business development".

The FCJ, he said, provides 30,000 square feet of dedicated space to the former Jamaica Manufacturers' Association, now merged into the Jamaica Manufacturers and Exporters Association, and the Small Business Association of Jamaica at Hayes in Clarendon and Torrington in Kingston for use by the members of the two associations; and has provided concessionary rates to small start-ups in Clarendon and Manchester.

Overall, client retention, he noted, is aided by a client awards ceremony to recognise clients using FCJ space for over 10 years; a Business Expo held at Garmex to allow our clients to showcase their products and services to the public; and the recording of client's testimonials which is used as part the FCJ's marketing programme.

Occupancy levels for FCJ factory space is running at 93 per cent, said the chairman, who also reported that delinquency on rental or lease payments was low, with only two tenants evicted from FCJ properties since the start of 2018. The identities of the two were not disclosed.