ARC Properties, the real estate and construction arm of ARC Group of Companies, is to spend US$16 million ($2.48 billion) to build out warehousing space in Ferry Pen, St Andrew.

“ARC Properties has acquired seven acres of land in Ferry Pen and our intention for that land is to build a super modern, world-class warehousing facility — and we are building this purpose-built warehouse both for domestic clients and for foreign clients,” Norman Horne, executive chairman of ARC Group of Companies, told the Jamaica Observer.

Horne said the title for the land at Ferry Pen has been transferred to ARC Properties, and architects are in the process of finalising the outlines of the warehouse. He said the expectation is that all approvals will be received in time for construction to start in September or October. Construction of the warehousing facility is estimated to continue for two years after.

“Demand for warehousing spaces for light manufacturing and for distribution has increased substantially since the advent of COVID,” Horne continued as he outlined the rationale for making the investment.

“We are in that space now. We have over 740,000 square feet of warehouse under management and we have a lot of pent-up demand for it, so we are responding to the demand,” he added.

Horne said the warehouse to be built will have an area of 140,000 square feet.

“It is near Kingston, it is near the port. It is an economic hub for Kingston and it will create massive opportunities for Jamaicans who are looking for [an] ideal space for office and warehouses combined and [who will] be able to do their production and their distribution from there. We have acquired the land, and between the land acquisition and construction we estimate that this will be a US$16-million project.”

“If you look back at warehouses in Jamaica, you will find that warehouses built in the ‘50s, ‘60s and ‘70s no longer work because they don’t meet international standards. Those warehouses are 12 feet high, for example — you can hardly operate a forklift in those. So we are going to build ultra-modern, world-class warehouses that meet all the world-class standards [so] that our Jamaican businesses will have access to be able to rent a world-class warehouse and operate.”

Horne said warehouse space is rented in the area for around US$12 per square foot, which is far lower than the US$28 to US$30 that is paid for spaces in Half-Way-Tree or New Kingston, adding that companies could use the opportunity to relocate their operations and save.

“There are persons who would rather have a warehouse storage somewhere else and have a storefront in the public arena. And in the post-COVID environment where the businesses have transformed into Amazon-type businesses where you do your shopping from your home, you don’t have to leave your home to shop and therefore that also is creating crazy demand for more warehousing. And plus, the Jamaica light manufacturing space has grown — people who have interest in light manufacturing and have interest in distribution space — and we are building these warehousing capacity that can house both your office and everything. It is an integrated warehousing concept that allows you to do manufacturing, and storage, and administration right from there.”

Ferry Pen, the area between Six Miles in St Andrew and the border village of Ferry in St Catherine, has become a popular spot for warehousing facilities in recent years. Several of the country’s biggest companies store goods in the area in various warehouses — ranging from vehicles, to food, to chemicals — with tenants in the area including Nestle, Tankweld, ATL Group, Wisynco, Derrimon, J Wray and Nephew, and Lanco paints.