Energy products distributor FosRich Company Limited expects its new supercentre will provide around 1,500 jobs when it opens for business at a projected date of June 2024.
Construction of the multistorey complex, which GraceKennedy Pension Fund, GKPF, is spending $1.8 billion to develop at 76 Molynes Road, was launched on Wednesday.
FosRich will occupy the entire complex under lease, but will sublet space on the building. It will also spend $200 million on outfitting the building to its needs.
The third of five levels is earmarked for a BPO operator, which FosRich CEO Cecil Foster has said is projected to provide around 1,000 of the new jobs.
Cecil and Marion Foster started the FosRich operation 29 years ago with three employees from a small office space in Princeville Plaza, Kingston. The company has grown to four retail outlets in Kingston, Montego Bay and Mandeville, and morphed into an electrical distribution company, covering the full range of products, such as lighting fixtures, wiring, electrical panels and solar energy systems.
FosRich also diversified into manufacturing PVC pipes, conduits and fittings from its Marverly Avenue, Kingston complex and through a new company called Blue Emerald in Hayes, Clarendon. That operation also repairs electrical transformers under contract from JPS. FosRich also has a growing export market for its pipes and is a regional distributor for Huawei electrical inverters.
GraceKennedy Pension Fund, whose assets are administered by Proven Group Asset Management, owns the three-acre plot on which the supercentre is being developed.
Chairman of GKPF Douglas Orane said the fund has set a range of 15-20 per cent for real estate holdings in its asset portfolio, and that the investment decisions are based on location and the quality of the tenant.
“This building will be here for a very long time, so it will be paying pensions for decade into the future,” Orane said of the supercentre.
He told the Financial Gleaner that GKPF only enters into long-term leases, and it has an approach where it invests in commercial and industrial real estate, but not residential real estate.
“We’ve found, based on our due diligence, that commercial and industrial real estate is a better fit for a fund of our size because we’ve found it is easier to manage,” he said, adding that GraceKennedy Pension Fund was one of the largest in Jamaica.
As of June, the private pension market was valued at over $705 billion, according to industry data published by sector regulator Financial Services Commission.
Real estate held third place among the asset classes with a total investment of $31 billion, representing just 4.39 per cent of the industry’s aggregate portfolio mix.
Orane said there was a case to be made for more investments in real estate, while noting that one of the drawbacks was a lack of blue-chip tenants