Sun | Oct 25, 2020

Proven to acquire Claro building

Published:Wednesday | March 19, 2014 | 12:00 AM
The Claro Building in New Kingston. - File

Avia Collinder, Business Reporter

The former Claro building in New Kingston - a part of the real estate portfolio of Digicel Jamaica - is about to change ownership.

On Tuesday, Proven Investments Limited confirmed that one of its subsidiaries was in the process of concluding acquisition of the 10-story edifice with offices and covered parking facilities totalling 73,000 square feet.

Digicel acquired the building from America Movil, parent of Claro, when the two swapped assets in a tri-country deal that was eventually executed in Jamaica and Honduras, but was killed by regulators in El Salvador.

The telecoms company so far has declined to confirm the sale, saying on March 3, when Wednesday Business first learned of a buyer, that it would not comment at this time.

Winston Hepburn, executive chairman of Proven REIT Limited, said on Tuesday that the deal is advanced - although negotiations are not yet concluded - and that the financing is being sought from local commercial banks.

"We haven't acquired the building yet. We are in the process of negotiating the purchase of the building and the stage of purchasing is extremely preliminary at this point in time. We are presently talking to two leading commercial banks and the decision on where we go will depend on the lending rate," said Hepburn.

The building, which front's Knutsford Boulevard, is intended for use as offices and a school of medicine associated with the University of Technology Jamaica, he said.

Chris Williams, the CEO of Proven Management Limited, says his company, which manages Proven Investments and its subsidiaries, was committed to building out Proven REIT.

"We are very happy with how he (Hepburn) is aggressively pursuing opportunities in Jamaica and the region. We are seeing good opportunities on both fronts," said Williams.

The Proven group has been in operation for four years. The company ended its third quarter in December 2013 with assets of US$146.43 million.

The Claro building, located at 30-36 Knutsford Boulevard in New Kingston, was initially owned by Oceanic Digital Jamaica, operators of the MiPhone brand, but became Claro's property when the company sold out and exited Jamaica.

The building was said by local valuators in 2012 to be worth US$143 per square foot or about US$10 million and possibly more.

Digicel is also trying to sell a five-acre property at Lady Musgrave Road, but is yet to secure a buyer, according to real estate sources.

Estimates are that the land may range above $100 million per acre in price. Valuators however believe the property might be affected by zoning regulations, requiring two-thirds residential and one-third commercial construction.