FCJ, Henan Fifth joint ventures approved
Two joint venture agreements between the Factories Corporation of Jamaica and Chinese company Henan Fifth Construction Group Company Limited have got the green light from Cabinet for the construction of mixed-use industrial and commercial developments in Portland and St Catherine.
Under the FCJ partnerships, Henan Fifth will develop the Boundbrook Urban Centre on a 668-acre property in Port Antonio, the capital of Portland; and the Naggo Head Integrated Business Centre in Portmore, which will sit on 32 acres.
The company’s track record includes the Rhyne Park Housing Estate, a 754-unit development for tourism workers in Rose Hall on the outskirts of Montego Bay.
Boundbrook, which was designed by GW Architects Limited, will incorporate 65,000 square feet of BPO space and 21,000 square feet of space for government offices, plus restaurants and a supermarket. Overall, the complex will span 140,000 square feet. The indicative cost of construction is $1 billion.
Factories Corporation Chairman Lyttelton Shirley said the centre will accommodate small manufacturers, a museum, a theatre, a music studio, and a transport centre. To support the development, Factories Corporation is considering securing a 50-year lease on the property from the Portland Municipal Corporation and the Railway Corporation of Jamaica.
Factories Corporation first announced its joint venture agreement with Henan Fifth for the Naggo Head development in November 2022, which will provide over 400,000 square feet of space for business process outsourcing operations, a media centre, educational institutions, and other commercial facilities to provide support services. Zone 2 of the development will incorporate buildings for warehousing.
The Naggo Head Integrated Business Centre project, which was originally referred to as the Naggo Head Tech Park, was estimated to cost US$75 million back in 2019. That’s the equivalent of $11.55 billion today; however, it’s unclear whether the cost has changed with time.
Henan Fifth told the Financial Gleaner that it was still in the process of finalising talks with Factories Corporation over the joint ventures. And FCJ did not respond immediately to requests for comment on the rollout periods and costs relating to the two ventures.
Factories Corporation is a state-owned agency that invests in the development of industrial and commercial space that it leases to companies and other ventures in facilitation of business activity.
Its current projects include the $6-billion Morant Bay Urban Centre in St Thomas; and the redevelopment and expansion of the Garmex Free Zone and which involves construction of 13 new buildings on 8.7 acres of green space in Kingston’s industrial belt.
Factories Corporation is also in the midst of divesting non-performing assets, noting on its website that properties valued at around $3.1 billion were being disposed of. They represent a third of its total property portfolio.
The developer of commercial real estate currently owns or controls over 1.69 million square feet of factory space, and approximately four hundred acres of lands.
According to the latest Jamaica Public Bodies report produced annually by the Ministry of Finance, the first phase of the Garmex project, representing 90,000 square feet of warehousing space, is already completed. Another 36,000 square feet of space for the micro, small and medium enterprises or MSME sector was also due to be completed by March of this year. But there was no immediate update on that element of the project.
For this fiscal year ending March 2024, Factories Corporation is projecting a surplus of $476 million. The agency employs 136 which it aims to reduce to 124 in the current year, according to the report.
Under its capital programme, the agency will be spending $872 million on phase two of the Garmex redevelopment project, which entails construction of another 96,000 square feet of space, inclusive of two warehouses, commercial building, and guard house.
The third phase, incorporating four warehousing structures on a 5.7-acre spread, is also expected to commence during this year, Factories Corporation has said.