BUILD­ING HOPES ON REAL ES­TATE

Ex­perts see tremen­dous op­por­tu­ni­ties for growth and job cre­ation in in­dus­try

Jamaica Gleaner - - GROWTH & JOBS - Jo­van John­son Staff Re­porter

SEV­ERAL STAKE­HOLD­ERS in the real es­tate sec­tor say plan­ning is crit­i­cal if the Gov­ern­ment is to cap­i­talise on the tremen­dous op­por­tu­ni­ties the sec­tor pro­vides for help­ing to cre­ate sus­tain­able eco­nomic growth.

“... Real es­tate can be a pil­lar of eco­nomic growth if we ap­ply plan­ning and an over­all ob­jec­tive, or strat­egy. One of the things that will im­pede eco­nomic growth is the lack of zon­ing or the lack of plan­ning,” Howard Mitchell, for­mer chair­man of the Na­tional Hous­ing Trust, told The Gleaner.

“In terms of com­mer­cial real es­tate and the eco­nomic growth, that [plan­ning] is re­quired and the kinds of fa­cil­i­ties that are re­quired for man­u­fac­tur­ing and com­mer­cial lo­gis­tics dis­tri­bu­tion [as well]. We started off with High­way 2000 and we zoned lands for de­vel­op­ment, but I have not heard any­thing fur­ther of that. I have not seen any pub­li­ca­tion of the zon­ing or any­thing to en­cour­age de­vel­op­ment go­ing on there.

“You can’t just have real es­tate as a tool for de­vel­op­ment, it must be planned real es­tate, and that is what they are miss­ing in this coun­try.”

Re­gard­ing non-com­mer­cial real es­tate such as hous­ing, Mitchell said the con­struc­tion of some hous­ing de­vel­op­ments in ar­eas like Old Har­bour, St Cather­ine, were not part of an in­te­grated de­vel­op­ment plan.” You build the houses out in Old Har­bour and they’re built or left out there by them­selves, and the peo­ple who live out there are like the French For­eign Le­gion.”

Ed­win Wint, pres­i­dent of the Real­tors As­so­ci­a­tion of Ja­maica, said he could not im­me­di­ately put a fig­ure on the dol­lar value of real es­tate, but he noted that one project he is work­ing on val­ues close to US$300 mil­lion (J$36 bil­lion).

He wants the Gov­ern­ment to pur­sue strate­gies to en­tice more for­eign di­rect in­vest­ments into lo­cal real es­tate de­vel­op­ment.

“That could re­ally push our growth num­bers if we had large real es­tate de­vel­op­ment and we had global play­ers com­ing in and do­ing large de­vel­op­ment. Then we would not rely only on Ja­maicans and those in the di­as­pora to buy,” he told The Gleaner.

In Au­gust, the Gov­ern­ment’s point man on in­vest­ment, Daryl Vaz, said the ad­min­is­tra­tion had been look­ing at pulling in ma­jor in­vest­ments and would be fo­cus­ing greatly on re­duc­ing the com­pli­cated bu­reau­cratic ar­eas.

‘IN­CRED­I­BLE’ IN­VEST­MENT

Re­gard­ing in­creases in cost of hous­ing over the years, Va­lerie Levy, the founder of the 30year-old Va­lerie Levy and As­so­ci­ates, said real es­tate re­mained “an in­cred­i­ble” in­vest­ment and tool for growth and job cre­ation.

“I know a house that sold for J $1.5m in 1984 on, say, five acres that was sold re­cently for US$1m (J $128m). So as long as the lo­ca­tion is well kept and close to ser­vices, it is in­cred­i­ble the way prices have moved up. It’s good or even bet­ter than keep­ing US dol­lars, be­cause of the de­val­u­a­tion.”

One pro­posal be­ing re­sub­mit­ted to the Gov­ern­ment re­gard­ing down­town Kingston real es­tate is the is­suance of land bonds that Vic­tor Cum­mings, trade ad­min­is­tra­tor, feels could drive eco­nomic de­vel­op­ment.

“What I have sug­gested, and I still stand by, is to is­sue these land bonds based on the value of the land. You put the bonds aside, if the owner turns up they can re­deem it. But more than likely, the per­sons who own the prop­erty will never turn up; so what you can then do is to lever­age the prop­er­ties for re­de­vel­op­ment.”

Real es­tate falls un­der the con­struc­tion sec­tor and ac­counts for about 10 per cent of gross do­mes­tic prod­uct and em­ploys ap­prox­i­mately 80,000 Ja­maicans, ac­cord­ing to the Eco­nomic

and So­cial Sur­vey 2015 re­port. It’s one of the ar­eas that the Gov­ern­ment ex­pects huge growth num­bers from this fis­cal year.

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