ICT/BPO risky, but investors motivated to make plunge
Mark Titus, Gleaner Writer
While supporting concerns raised about the wisdom of investing without a guarantee on returns, investors in the business of constructing ready-to-use facilities for the information and communication technology/business process outsourcing (ICT/BPO) market believe that such a venture is worth the risk.
Carlene Sinclair, president of the Realtors Association of Jamaica, in response to a call by the Government for the creation of sufficient business-ready office space to support the growth of the ICT/BPO industry, has argued that local developers and investors are apprehensive to support such a project because it may be bad for business.
"You are talking about interest rates and parking. You are talking about two to three acres of land that they will have to own and then turn around and construct 30,000 to 50,000 square feet of state-of-the-art building and then you hope the business will come," she told The Gleaner in a recent interview.
"Jamaica itself, geographically, is a good place for ICT, and we speak the language English and have great infrastructure like the Internet, where it is readily available, unlike in some countries, but ... ICT can dry up. You can come in now, but there is no certainty that you will be here in five years' time," added Sinclair.
However, Clive Fagan, chairman of the Factories Corporation of Jamaica and the Montego Bay Free Zone, said his team remained upbeat about the lucrative global market.
"We are very positive about ICT growth and development ... . All the facilities that we now have in the ICT/BPO industry, are 100 per cent occupied," said Fagan. "We know the demand is there and we continue to position ourselves to provide space for entities that desire to invest in the sector."
beginning in mobay
According to Fagan, his entity will begin the development of 67,000 square feet of space in Montego Bay this month, while the construction of another 120,000 square feet is to get under way in Portmore as part of a plan to build 750,000 square feet in the Sunshine City over time.
"Those we have built as way back as the late 1990s are still occupied, and there are some that came on later that remain occupied," said Fagan. "And there are entities that have occupied spaces for 10, 12, even 14 years that are still there, so from a public-sector perspective, this (bad business) has not been our experience."
Francis Kennedy, president of the Jamaica Chamber of Commerce, attributed the trepidation to, among other things, high construction costs and the absence of buildings that are designed on an open-office system. However, Montego Bay-based land developer Mark Kerr-Jarrett, of Barnett Estate Limited, said it was more than investing in a building.
"It is about fulfilling a vision for Montego Bay, of which a part is ICT, but we also have the University of the West Indies Western Campus to be developed," he told The Gleaner. "Constructing a building without a tenant is risky, but it is a calculated risk we were willing to take; it's all part of a business plan.
"Building cost is very expensive and you have to negotiate real hard with the prospected investor to get the rental that makes any investment feasible. For us, it's different. We took the calculated risk and we are moving forward," added Kerr-Jarrett.