VMIL buys BPO property at Barnett tech park
Victoria Mutual Investments Limited, VMIL, has acquired commercial property utilised as a call centre at the Barnett Technology Park, an outsourcing hub in Montego Bay. The investment company first announced the purchase earlier this year but not...
Victoria Mutual Investments Limited, VMIL, has acquired commercial property utilised as a call centre at the Barnett Technology Park, an outsourcing hub in Montego Bay.
The investment company first announced the purchase earlier this year but not the location nor the terms of the deal. The acquisition price was US$18 million but the current value is slightly higher.
Deputy CEO Brian Frazer says the property was estimated “at US$19 million at the last valuation”. In Jamaican dollar terms the value equates to about $2.9 billion.
The building at Megabyte Drive at Barnett Tech Park spans 80,000 square feet.
The new asset, which was purchased in July, comports with VMIL’s goal of adding real estate to its portfolio. The company has previously said it considers commercial property to be less risky than residential real estate in the current economic environment.
Broadly, however, it is bullish on real estate investments amid rising inflation, saying the asset class is “expected to outperform compared to equity and fixed income”.
“Secondly, we purchased this particular property in an effort to further diversify our real estate portfolios based on locations, as currently most of our properties are in Kingston,” Frazer added. “This property will provide our clients and portfolios with steady US dollar rental income which also provides a hedge against currency depreciation.”
The building is currently tenanted by American outsourcing firm Conduent Solutions, which is listed on the Nasdaq exchange in New York.
VMIL is the parent company for VM Wealth Management Limited, which manages one of the largest real estate unit trusts, the $9-billion VMWealth Classic Property Portfolio.
Frazer said that the investment was arranged by the VM Wealth’s capital markets unit, which utilised a trust structure with an independent trustee that allowed multiple investors to participate in the ownership of the newly acquired property.
“Several investors were involved in this acquisition and our capital markets team customised a solution that would allow all investors to participate in the ownership of this hard currency-generating real estate asset,” he said.
“The property was purchased using cash; however, the investors were primarily our clients, unit trust property fund and pension funds, while VMIL only accounted for a small portion of the transaction,” Frazer added.
Barnett Tech Park, which was developed by Barnett Limited, comprises 10 lots on a 46-acre spread. Eight of the lots have been developed with structures, according to Barnett’s website.