LIFE OF Jamaica has already sold most of the smaller units in its Winchester Business Centre commercial development, but is still struggling to offload the large units, states its vice-president of investments, Rohan Miller.Real estate experts argue that this points to the overwhelming need for appropriately sized office space in desirable areas in the capital city.
Sixty per cent of the units in the billion dollar commercial development have already been sold just four months after the launch, Miller told the Financial Gleaner. "The smaller units, those below 1,500 square feet, all went within the first two months of the project," said Miller. Of the 48 units, 31 have been sold.
The 48 units of the commercial centre will feature two buildings with a total office space of over 100,000 square feet. The complex is designed to accommodate professional suites, light retail, commercial and warehousing business entities and will have about 230 parking spaces. Starting at $10,000 per square foot, the units range in price from $5 million to a high of $275 million.
Located on Hope and Winchester Roads the Business Centre represents the second phase of a massive real estate development undertaken by LOJ on the four acres of land it bought from Jamaica Broilers in 2004. The first phase, the Winchester Estate apartment complex, is almost finished and will feature some 60 studio, one and three bedroom apartments.
Realtor Anya Levy of Valerie Levy and Associates noted, "Winchester was gobbled up very quickly ... not because of the price but because of the size. A lot of people don't need large spaces anymore. Companies are becoming more efficient -- all they need is a computer. When we have units for rent it is the small spaces that go quickly." She argued that the success of the project was supported by its location, the flexibility of its design, facility management and adequate parking.
"The attraction with Winchester is that it is still considered New Kingston. It's going to be a hub [with] over four acres of office space. Another plus is that it is mixed use, there is going to be less maintenance since it is new and it is offering a lot of parking which is a big problem in New Kingston."
LESS THAN HALF
Still, while most of the smaller units went, they constitute less than half of the total area of the project. For example, the sprawling 24,000. square foot unit on the third floor of one building - which is going for $275 million - has not attracted any firm offers and, as such, LOJ is contemplating dividing the unit in four. "We think that unit would go faster if we make it into smaller units," Miller said.
The LOJ executive explained that, "If we had more smaller units we would have sold three times the amount we had [but] we need a mix of smaller units and bigger units because while a lot of people may be interested in the smaller units you need to keep the project viable."
Asked why the units have not been completely sold, he replied that, "A lot of people wait until they can actually see the building. Because despite the fact that you are out there marketing the development some people will delay until they find out what the mix is and who the tenants are."
The development, which has been delayed because of the cement crisis, is slated for completion by January 2007.
SOURCE: Financial Gleaner, June 16, 2006
