Soft real-estate market puts NCB in breach - King Street branch sold for $128m - Has two more properties to offload
Published: Wednesday | April 15, 2009
Patrick Hylton, group managing director, National Commercial Bank of Jamaica. - file
National Commercial Bank (NCB) is selling to the Government the building that used to house its shuttered King Street branch and has on the market two other bits of real estate - the sale of which will bring NCB back into compliance with regulations prohibiting banks from holding property not being used for their business.
The sale of the 10,500 square feet King Street building - for a reported $128 million - was confirmed by both NCB and the justice minister, Dorothy Lightbourne.
The deal was substantially above the asking price of the Harbour Street property, which, although significantly larger than the one on King Street, has apparently been priced at only $22 million, or less than a fifth of what the Government is paying for its purchase.
There was no immediate explanation for this wide pricing differential, except for Lightbourne's comment that the King Street property has substantial parking.
It is a shame
Said Anya Levy of Valerie Levy and Associates of the Harbour Street building: "It is absolutely a jewel, most heavenly - the architecture building. It is a shame it has not gone to the Government to be restored. (But) hopefully it goes in the right hand."
The King Street building will be used as an extension of the Supreme Court, whose arched, ornate structure stands next door.
"The plan is for the expansion of the Supreme Court," Lightbourne told Wednesday Business.
"Part of my plan to reduce the backlog (of cases) is to bring on six more judges, so we need chambers for those judges and we need additional courtrooms."
The other properties that NCB is attempting to sell include an 11,382 square feet former branch on Harbour Street, also in downtown Kingston, from where corporate Jamaica has retreated over the past quarter century as the area became hard and gritty.
The third is a near 12,600 square feet building in the south-central city of Mandeville, for which NCB said a deal is close to finalisation.
A technical breach
In its annual report for 2008, NCB noted what appeared to be a technical breach of the Banking Act preventing the acquisition of property by banking institutions except as premises for the conduct of banking business or for the housing of staff.
"These properties were formally utilised as branches and though management has made efforts to dispose them, to date no purchaser have been found," NCB said in the notes to its accounts.
Now, the Government is paying over $12,189 per square feet for the King Street building - it has already made a deposit - and, according to Lighbourne, plans to spend another $90 million on its renovation.
Refurbishing of the ground floor, the first floor and the basement will begin this year.
By next March, the minister expects to have ready four judges' chambers, four courtrooms with two masters chambers and two juror rooms and registrar's facilities.
The re-redevelopment of the King Street building will mean putting back into use one of the many downtown properties that have become untenanted and derelict.
Significantly, too, it will give impetus to the undertaking by Prime Minister Bruce Golding to reverse the trek of government offices and agencies from downtown to the New Kingston business district.
NCB's sale and the prospective refurbishment of the Harbour Street building would, similarly, be a fillip to the old section of the Jamaican capital.
Built with the stylised columns and arch fašades that characterised Barclays Bank - it once owned NCB - branches in British colonies, the property has been empty for several years as NCB rationalised its branch operations.
It was recently relisted with two real-estate brokers, Coldwell Bankers and Valerie Levy and Associate.
"We have been trying to sell it and we have been trying to ensure that all our premises are actively used and where they are not used, they are up for sale," said Sheree Martin, corporate spokeswoman for NCB.