GraceKennedy puts BPO outsourcing space for rent after Sutherland lease ends

GraceKennedy Ltd has returned a major business process outsourcing (BPO) facility in downtown Kingston to the rental market after the departure of long-time tenant Sutherland Global, ending a seven-year occupancy at the Central Sorting Office (CSO) complex on South Camp Road.

The listing offers 60,000 square feet at the Central Sorting Office (CSO) complex for US$75,000 a month, about J$12 million. It pitches the property to outsourcing operators, call centres, government agencies and corporate headquarters. The space is air-conditioned and includes a staff lunchroom and parking for about 40 to 50 vehicles.

Steven Whittingham, chief executive of GraceKennedy Financial Group (GKFG), confirmed in an interview that Sutherland’s lease had ended. GKFG is a subsidiary of GraceKennedy Group, led by CEO Frank James.

“The lease came to an end. Seven years, I think it was. Nothing alarming, that’s what happens in business,” Whittingham said. “I don’t know if they’ve shrunk their operations or what.”

He said the space is being actively marketed: “We’re open for business. It wasn’t designed with Sutherland only in mind. It’s open and it’s well suited for any BPO tenant”.

The Financial Gleaner has sought comment from Sutherland. The US company, formed in 1986, is one of the largest BPO investors in Jamaica, and its clients include Fortune 500 companies.

VACANCY ADDS TO GROWING INVENTORY

The vacancy comes as Jamaica’s outsourcing sector contends with consolidation among global operators, automation and softer demand in some customer-service segments. Employment has retreated from peak levels as operators adjust their footprints and shift towards higher-value services.

The Financial Gleaner’s tally of the public MLS real estate listings shows about one million square feet of business process outsourcing space for rent, up from the more than 245,000 square feet of vacant space it counted in August. It signals a downturn in the sector.

GraceKennedy entered the project in 2015, when its subsidiary GK Investments Ltd signed a lease with the Postal Corporation of Jamaica for a section of the CSO property. The building, which houses Jamaica’s main post office, was underused and in disrepair, including a failed air-conditioning system. The postal service’s administrative headquarters was established on South Camp Road in 1960, and the CSO was fully constructed in 1980.

GraceKennedy spent more than $300 million upgrading sections of the building. The first phase covered 20,000 square feet and the second added 40,000. Sutherland became the anchor tenant, and more than 1,400 people worked at the facility at one point.

neville.graham@gleanerjm.com