Proven REIT, SAJE partner on $2b warehouse complex
Proven REIT Limited, PREIT, the real estate arm of Proven Investments Limited, is teaming up with SAJE Logistics Infrastructure Limited to develop a major warehouse complex at Marcus Garvey Drive near the port of Kingston.
The new development is to be named Kingston Gateway Warehouse Complex.
SAJE Logistics is the property development, investment and logistics spin-off of the SAJE Group that grew out of the business reorganisation of the Shipping Association of Jamaica. The joint-venture partnership deepens SAJE’s investment in the logistics business and represents PREIT’s maiden voyage into that growing business segment.
The 112,000 square foot commercial development is being targeted for rental as modern warehousing space. Building approvals are expected to be in hand by the end of the first quarter of the 2022, with construction scheduled to begin in the second quarter.
The construction timeline is 15 months, putting the expected completion of the project, said to be valued at US$13 million, or just over $2 billion, at mid-2023.
Responding to Financial Gleaner queries, Proven REIT CEO Aisha Campbell disclosed that the ownership split will be 50:50 and that the completed facility will be managed by SAJE Property Services Limited, the property management affiliate of SAJE Logistics. The construction is to be financed by a commercial bank loan, she said.
In announcing the deal, PREIT and SAJE did not divulge the value of the four acres of land that is in the process of being acquired, but in follow-up responses to the Financial Gleaner, said the equity in the project will be split, including the financing of the property acquisition.
“PREIT and SAJE will fund the development costs, including land acquisition, professional and approval fees,” Campbell said via email.
Shipping Association Group CEO Trevor Riley told the Financial Gleaner that the land, owned by SAJE, was previously rented to business tenants, who are in the process of vacating the premises to free it up for the development.
The planned warehouse complex promises businesses the benefits of capitalising on reduced operating costs, delivery times, and overall streamlining of operations with its proximity to downtown Kingston, the port and the north-south and east-west legs of Highway 2000.
The property has access roads into Newport West, making it attractive to businesses that use Port Bustamante. In addition, it is close to both the Kingston metropolitan area as well as major communication hubs, including Kingston Wharves Limited, Kingston Freeport Terminal Limited, and the Tinson Pen Aerodrome.
“PREIT’s mandate has always been to develop and provide access to both residential and commercial solutions across the Caribbean. We are glad that we could kick off our entrance into the logistics sector in Jamaica,” Campbell said in the release announcing the project and joint-venture partnership.
PREIT invests in residential and commercial real estate in Jamaica and overseas and has stated its assets at US$55 million, with some 109,000 square feet of fully occupied commercial space located at New Port West in Kingston and Portmore Pines Plaza in St Catherine. The 21-unit Kingston Gateway warehouse complex adds to several large residential developments done by PREIT locally in Kingston and Mandeville, and in the Cayman Islands, as well as soon-to-be-completed commercial complexes at Bloomfield Park in Mandeville and the Gladstone at Lady Musgrave Road in Kingston.
The partners say the planned project will create jobs and other opportunities.
“SAJE made a strategic decision to locate its business as a provider of modern infrastructure for the logistics sector. We have bet on the future of this industry, by leveraging our vast logistics experience to support Jamaica’s increasing importance to the global supply chain,” said Riley in the joint release.
“We are very happy to be partnering with PREIT in this our first venture together and look forward to working with their dynamic team. I see tremendous opportunity in this partnership and will be happy to learn from PREIT, as well as to share our experience in this sector,” he said.
A similar warehouse development project was previously announced by port company Kingston Wharves Limited to be sited at a location nearby at Ashenheim Road. That project, announced about three years ago, was projected to cost US$30 million, or around $4.6 billion at today’s exchange rate.