Stanley Motta back on track with growth plans
Property developer to add more floors, new income at 58HWT tech park
Stanley Motta Limited, the listed developer of 58HWT, the commercial park on Half-Way Tree Road in Kingston that is largely utilised for business process outsourcing, BPO, operations, has a plan to increase the rentable space there to rake in more income. Shelved since at least last year, the plan to grow the available square footage of office space by roughly a quarter in two years’ time, was shared with shareholders this week. However, with almost all of the land acreage already covered with buildings and needed parking space, the owners say there is nowhere to go but up.
Stanley Motta has already drawn up the new development plans for the six-acre property and handed them over to the Kingston and St Andrew Municipal Corporation for approval. A nod from the planning authority would give the Musson Group company the green light to hunt new clients and, ultimately, a fresh flow of rental income into the real estate business.
The tech park, spanning 216,360 square feet, with 215,000 square feet already built on, and the rest being driveway and parking slots, is home to mixed commercial activities, but is largely occupied by call centre operators under the Special Economic Zone, SEZ, facility.
Five buildings sit on the land, with BPO operator Alorica being the largest tenant, occupying 162,585 square feet, or roughly 75 per cent, in the tech park. The Alorica-occupied building, which is referred to as unit four, already runs five floors. But Stanley Motta’s management says there is space to build up on at least three other buildings, making more room for existing tenants who may want to expand, or new tenants registered under the SEZ investment-attraction regime that gives tax and other concessions to developers, financiers and occupants of business spaces so designated.
Unit one, a recently renovated building now shared by two technology firms, and the offices of Stanley Motta’s management company, unit three, also recently-renovated, and unit five, where General Accident Insurance Company is located, are all two-storey structures. Unit two is one storey.
“Look around, and anything that’s short has the opportunity to get taller. Consolidated, we have 215,000 square feet, and I think we could reach at least 300,000 square feet in the next two years. The aim would be to try and double our square footage in five years,” Chairman and CEO Melanie Subratie told the Financial Gleaner following the company’s annual general meeting on September 27.
The tech campus’ five buildings are arranged around a historical building of Georgian architecture, the Richmond Park Great House, said to have been built between 1800 and 1805 by the wealthy Kingston merchant from England, John Mais, who made his money owning and operating several large coffee plantations in St Andrew.
The great house, owned by Stanley Motta’s parent, the Musson Group, houses shared amenities, including meeting rooms, a cafe, and an ABM machine.
The space occupied by General Accident is owned by Unity Capital, a wholly owned subsidiary of Stanley Motta.
“The General Accident building isn’t in the SEZ space, we are looking at what we can do with that, but I don’t think we will be making any adjustments to that building anytime soon,” Subratie said.
The leases at 58HWT are denominated in United States dollars and go for about US$12 per square foot. The average lease tenure is about five years.
For the half-year to June 2021, Stanley Motta’s net profit increased 19 per cent to $110 million, on revenues which increased by 8.1 per cent from $224.9 million to $243.3 after tenants paid up rent that was deferred from last year, when the deferred payment facility was extended to businesses at the complex that experienced challenges from the COVID-19 economic downturn.
This year’s revenue increase was attributable largely to foreign exchange gains from the depreciating Jamaican dollar to the US dollar, which was at $141:US1 in June last year and more than $150:US$1 in June this year.
The fall-off in revenue last year resulted in the delay of capital projects Stanley Motta had planned for 2021. Subratie says the company is moving forward with its expansion plan for the remainder of the year and into 2022.
“We don’t have a full time frame of when the work will get going, but we still plan to go ahead and develop the underutilised spaces,” she said.
Subratie did not give an estimated cost for the expansion or say how the company plans to fund the additional buildout. Stanley Motta has cash resources of $151 million, up from $91 million as at June 2020. Its cash resources for the half-year pushed total assets of the company to $5.8 billion.