STANLEY Motta Limited (SML) is targeting by the end of January to begin its US$12-million ($1.83-billion) development at its 58 Half-Way-Tree Road, Kingston location.

The property rental company currently has five units covering more than 200,000 square feet of rentable space. The special economic zone (SEZ) designated property hosts business processing outsourcing (BPO) businesses and other financial service based businesses. One such tenant is Alorica.

In its 2021 annual report, SML stated that it would be increasing the square footage on unit 1 which has over 8,266 square feet of rental commercial office space and only one floor. The expanded unit 1 will have 84,000 square feet of rentable space on a 126,000 square feet building with 10 floors. It’s being designed by architectural firm Synergy Design Studio.

At its annual general meeting held on Wednesday, Chief Financial Officer Clifton Morgan confirmed that the development should begin in the first quarter of 2023.

“This building will assume the footprint of the unit 1 building that’s there now. It’s being pitched to BPO companies and a variety of other office users,” said Morgan.

Sandra Glasgow, who chaired the meeting, said that there has already been an expression of interest in the space.

“This will certainly expand our footprint,” Glasgow added.

Morgan also reiterated the benefits the company has achieved by refinancing its US$4.5-million loan into Jamaican dollars (JMD) earlier this year with a local bank. The tenure of the new loan is 20 years at a fixed interest rate of 8.75 per cent. SML earns lease income in United States dollars, but its financials are in Jamaican dollars. This resulted in erratic movements in its finance costs on its income statement.

Morgan also noted that the company should benefit from a marginal increase in its lease income due to the 25 per cent increase in rent charged on two buildings on 50,000 square feet of space. The leases were also extended by an additional three years as well with the rental increase taking effect from April 1.

SML’s revenue marginally increased by three per cent to $250.08 million for the first half of 2022 due to the depreciation of the JMD against the USD during the period. Its net profit growth was flat though at $110.45 million with an earnings per share of $0.15.

SML’s asset base is up 12 per cent year over year to $6.55 billion largely due to the increase in its investment properties valued at $6.23 billion. Its total liabilities increased by 10 per cent to $1.11 billion while shareholders equity closed the period at $5.44 billion. Its stock price remains down 11 per cent year to date at $5, leaving it with a market capitalisation of $3.79 billion. With a book value of $7.18, this means the company’s price to book ratio is 0.70 times.

SML just paid a dividend of $0.066 per share last month or $50.02 million to shareholders. The company had funds from operations (FFO) pay out ratio of 71 per cent in 2021, which meant it paid out $0.71 for every $1 of funds generated from operations which doesn’t include revaluation gains. However, a shareholder enquired as to whether or not the company would ever consider paying dividends in USD.

“We don’t rule out that possibility and it’s something that we definitely will continue to consider going forward. There are no immediate plans to do that,” Morgan said in response to the query.