Ashford W. Meikle, Staff Reporter
President and chief executive officer of Pan-Jamaican Investment Trust Limited, Stephen B. Facey, listens attentively to a question posed by a shareholder at Pan-Jam's AGM held last week at the Jamaica Pegasus Hotel in New Kingston. - Norman Grindley/ Deputy Chief Photographer
MAJOR INVESTMENT holding company, Pan-Jamaican Investment Trust Limited, says that it could embark on new commercial and residential real estate development in the near future according to chairman of Pan-Jam, Maurice W. Facey.
"We are looking at it ... In fact at the present time, we are examining a tender a bit carefully," said Mr. Facey at the company's annual general meeting held last week at the Jamaica Pegasus Hotel in New Kingston. However, the businessman did acknowledge that new construction was fraught with problems and presented challenges vis-à-vis financial viability.
"The problems of new construction are significant in the sense that the cost of new construction is 60 to 100 per cent above what is usually considered the commercial value of the real estate the market value and it is going to take some time for these other rates rents and so on to get to the level where we can begin to invest in new construction," Mr. Facey said.
Rental in commercial areas in Kingston's premier business districts New Kingston and Half- Way Tree, for example range from $900 to $1,200 per square foot. It costs about $1,000 to $2,000 to construct commercial business space. On the other hand, residential building costs are higher, starting at about $2,700 and may go up depending on the quality of fixtures used.
The company, in its 2004 annual report, says, "demand for retail space remained strong."
President and chief executive officer of Pan-Jam, Stephen B. Facey, noted, "Rental rates need to double to justify the cost of construction." He also added, "Interest rates need to move down further to really justify that sort of long-term investment." Turning to the residential sector, the CEO said, "I think there is clearly more demand in the residential sector. That [development] is a deal in profit rather than investment. So we're looking at that area seriously. It's one of the areas we can focus on."
Pan-Jam, through its subsidiary, First Jamaica Investments Limited, owns and manages several properties in Kingston (via Jamaica Property Company, Jamaica Property Development and Jamaica Property Management. It's associated companies, Impan Properties Limited, St. Andrew Developers Limited and Knutsford Holdings are also involved in office rental and property development. Last year the company had an occupancy level of 92 per cent, with revenues increasing by 28 per cent, up to $452.6 million.
Highlighting the company's achievements past year, the president noted that "2004 was a good year with our group turning an excellent performance. As we advise in the quarterly reports published during the year ... a significant contribution to this performance were the changes that took place in our group over the past 24 months and the synergies and efficiencies, which we have realised from such changes.
SPECIFICALLY, THESE
CHANGES WERE:
Hardware and Lumber's (H&L) outstanding performance as a result of "the merger with GraceKennedy's Rapid and Sheffield, driven by the improved situation in the economy, greater construction throughout the country and ... Hurricane Ivan."
Employee Benefits Adminis-trator Limited (EBA), its joint back office venture with Life of Jamaica continued to produce increased revenues along with savings achieved through efficiencies.
Turning to Pan-Jam's future plans, the CEO said, "2005 it will be a year of consolidation. The past five years have been very dynamic. We have had a lot of changes in our group and we are consolidating these changes, understandably looking around for new opportunities (and ) we expect great results from H&L and from LOJ. We also have a nice nest egg that we are going to nurture in cash ... while we look around for new opportunities to exploit for the company."
