Stanley Motta working on payment plans for COVID-affected tenants
STANLEY MOTTA Limited, SML, the owner of the 58 HWT tech park in Kingston in which Alorica occupies the majority of space, says it is working on payment plans with tenants affected by the COVID-19 pandemic to honour their rent commitments.
The real estate company has also pushed back capital projects planned for this year to 2021.
Alorica is an American-owned business process outsourcing, or BPO, company whose Portmore operations in the neighbouring parish of St Catherine was the centre of a large outbreak of COVID cases in April. No cases were reported at its Kingston centre.
Through lease agreements between SML and Alorica’s local subsidiary, Jamaica Agent Services Limited, the American company occupies 162,585 square feet of space at 58 HWT, amounting to more than 80 per cent of the 200,000 square footage available in the tech park.
The second-largest tenant is general insurance company General Accident. And Stanley Motta also has a three-year lease agreement for a section of unit one with Transactions E-Pins Limited. Stanley Motta, General Accident and E-Pins are all connected to the Musson Jamaica group of companies.
“SML is working closely with its tenants to ensure that where there has been significant impact to their businesses, payment plans have been mutually agreed, and all tenants have committed to honouring their rent commitments,” said Stanley Motta Chairman and CEO Melanie Subratie in a note to shareholders appending the company’s first-quarter earnings report.
“Within the complex, we are supporting all endeavours to reduce the risk of exposure to those persons using the facilities. Additional costs in relation to cleaning and repairs and maintenance is anticipated but are not expected to materially affect our results,” she said.
Stanley Motta collected rental income of $112 million in the March quarter, the majority of which would have come from Alorica/Jamaica Agent Services, compared to $101 million in the comparative 2019 period. However, profit dipped one-tenth, from $70 million to $63 million, due to higher operating expenses.
An outbreak at Alorica has been blamed for 234 of Jamaica’s 556 confirmed cases of COVID-19. The call centre’s operation was ordered shut for a period of 14 days in April to minimise the spread of the virus. Stanley Motta has no association with Alorica’s call centre in Portmore.
Due to heightened concerns that the Alorica cases sparked, all BPO operations are required to implement safety measures in preparation for the lifting of work-from-home orders and resumption of normal work activity on June 1.
Subratie did not respond to requests for comment, but the company, in its outlook on COVID, advised shareholders that it was well positioned to service its loans. Stanley Motta has about $52 million worth of loans due in the short term, and another $678 million payable over the long term.
“As our debt is all long-term, we will not be impacted by any short-term financing issues which would traditionally impact REITs [real estate investment trusts], as seen in other global markets,” Subratie said.
Stanley Motta has a five-year US$5-million loan with the Development Bank of Jamaica Limited used to develop about 132,000 square feet of ICT/BPO space at 58 HWT. The loan, at 4.5 per cent interest, is secured by a mortgage over the real estate. Four years of the loan term have elapsed.
JN Bank also holds a mortgage over property at 58 Half-Way Tree Road as security for a $170-million loan priced at 11.375 per cent per annum.