2 months ago
8
The shortage of warehouse spaces in Kingston and in other parts of the country are currently being addressed, although the demand for such spaces remains high, say people involved in the construction and real estate sectors.
David Dixon, realtor with RE/MAX Realty in Kingston, said while there are a number of projects under construction to address the apparent shortage in warehouse space, he still receives requests for these spaces from his clients.
Focusing on Kingston, Dixon said his clients differ widely in the location they prefer when seeking rental space.
“Some people want to be close to the Port of Kingston, but there are businesses uptown who want storage space and might prefer Molynes Road, off Washington Boulevard, Half-Way Tree or Hagley Park Road,” Dixon said.
The realtor said the demand for warehouse space varies from small businesses to large clients seeking from as low as 1000 square feet to 30,000 square feet of space.
He said rental prices depend on the level of amenities provided in the space.
“For example, if the warehouse is gated and has security that might along with location determine what rates are charged. On average for smaller shops or warehouses, the rates are much higher. It can go between US$12 and US$15 per square foot per annum,” said Dixon.
“But if somebody wants 20,000 square feet to 30,000 square feet, obviously, they’ll get it much cheaper between US$9 and US$12. The price for office space can run you between US$18 and US$25 per square foot per annum depending on whether they have nice tiles, windows and fixtures, elevators and other amenities,” he said.
One company that has been active in addressing the warehouse shortage is Tank-Weld Limited.
The company is currently building out 250,000 square feet of space at Ferry, which will bring its inventory in that area to 750,000 square feet. Ferry sits at the border of Kingston and St Catherine.
“We first spotted the demand for warehousing years ago, well before COVID when we put up the first 60,000- square-foot space at Ferry, which was rented before it was finished. So we immediately started on another 100,000 square feet, which also was very quickly rented,” Tank-Weld chairman and CEO Christopher Bicknell told The Financial Gleaner.
The company then embarked upon two other projects of 100,000 and 150,000 square feet, respectively, for which tenants were quickly found. Bicknell said they have embarked upon its largest project in that area, another 250,000 square foot space that can be used for storage, manufacturing, distribution or offices.
“We’re running fast with the construction because there is a demand that we want to address,” Bicknell said.
He said while there is a need for mini-warehousing spaces of 2,000 square feet or less, the Tank-Weld model is to cater for its larger clients involved in bulk manufacturing, wholesaling and distribution.
Meanwhile Tank-Weld is carefully watching developments in other parts of the country, with a view to replicating the Ferry model elsewhere.
“We have lands in Rio Bueno and in Montego Bay that we will look to develop,” said Bicknell.
“Warehousing is probably the greatest need in terms of commercial development in Jamaica today, greater than offices in my opinion. This is because it offers businesses a cheaper space to start rather than offices with a higher level of finishes. So a company can start out with a lower rent and internally build out the kind of facilities they need along with the space to store their goods and operate,” he explained.
Meanwhile, president of the Private Sector Organisation of Jamaica Metry Seaga said there seemed to be much more warehousing space available than a year ago.
“There are multiple developers undertaking projects right across the island to fill that demand,” Seaga said.
“I don’t have any empirical data, but it would seem as though the shortage was right across the spectrum of our members and that shortage is being closed rapidly now, and a lot of space is becoming available,” he added.
English (US) ·