BOTH government and private sector developers have been investing in infrastructure for business process outsourcing (BPO), aiming to benefit from the leases and rentals in US dollars paid by many overseas operators.

Factories Corporation of Jamaica (FCJ) is one government entity which has expressed interest in investing in “integrated business complexes”, including space for BPO.

The corporation is currently building the Morant Bay Urban Centre at the site of the old Goodyear factory in St Thomas, which, at a cost of $5.9 billion, will see space for government entities and private sector companies to include BPO companies.

The agency also has on its books a planned expanded technology park in Portmore, St Catherine, which involves the development of 34 acres of land in Naggo Head, and involved space initially for usage by the information communications technology (ICT)/ BPO sector.

Port Authority acceleration

However, it is the Port Authority of Jamaica which has accelerated construction for the ICT sector in Portmore and initiated the biggest infrastructure buildout.

Under subsidiary Kingston Freezone Limited, the authority has embarked on the $3.5-billion development of a Portmore Informatics Park allowing its clients base access to the labour pool of the growing Portmore community.

On May 5, 2022, new BPO office spaces at the Portmore Informatics Park in St Catherine was commissioned by Prime Minister Andrew Holness.

The additional buildings, comprising 157,000 square feet, complement the 50,000 square feet that previously existed, increasing the authority’s BPO space in Portmore by 300 per cent.

In Montego Bay, through its subsidiary the Montego Bay Free Zone (MBFZ) which was established in 1985, the Port Authority operates what is the centre of Jamaica’s BPO industry, occupied mainly by overseas operators.

Several private investors have also poured significantly into BPO infrastructure, including Barnett Limited in Montego Bay and Stanley Motta Limited (SML) in Kingston.

Melanie Subratie, CEO of SML said, BPO investment property for the company is worth over US$35 million. Eighty-five per cent of space is leased to BPO. Ground was also broken by SML last week for a new building for which the development cost is US $12 million.

Private equity is also getting involved in BPO infrastructure investment. Eppley Caribbean Property Fund Limited (ECPF) earlier this year acquired a 99,000-square-foot, purpose built BPO facility off of Molynes Road in Kingston, Jamaica.

The facility is the new Kingston campus of itel and will house approximately 1,400 BPO seats. ECPF completed the acquisition in an equal partnership with JMMB Fund Managers.

Investment constraints

A local real estate developer, who asked not to be identified, said projects have slowed somewhat due to uncertainty about work from home.

It was noted, “BPOs are still choosing to come to Jamaica and global brands still choose Jamaicans as a preference for BPO. There is still significant demand for space. However, the Global Services Association of Jamaica (GSAJ) is asking for a 30 per cent work-from-home allowance, which would obviously curtail real estate expansion and construction by the same measure.

“It would be wise to see what has been approved by regional neighbours such as the DR and Colombia before the Government decides on it. This pandemic development cannot be walked back and so we need to accept WFH to remain competitive globally, but we need to think more clearly about where we fit into the competitive landscape.”

The developer expressed the belief that the sector is also being constrained by the work pool and states, “Jamaica is at full employment. More companies want to locate here, and so there is an issue with whether there are enough people to be able to fill the positions. In the public domain the PSOJ’s president and the prime minister have mentioned this.”