Shifting Sands: Jamaica’s Real Estate Developers Pivot Amid Outsourcing Uncertainty
As the outsourcing sector in Jamaica faces a wave of uncertainty, real estate developers are recalibrating their focus. With construction dollars now directed toward diverse business spaces, the landscape of development is changing.
Dayton Wood, chairman of the Jamaica Developers Association (JDA), highlights a noticeable decline in construction projects aimed at housing outsourcing enterprises. “There has definitely been a dip,” he notes, pointing out that many operators are consolidating and reducing their need for office space. The pandemic taught us that remote work is viable, leading to a decreased demand for traditional office environments.
The Outsourcing Sector: A Snapshot
The outsourcing sector, often called the global services sector, employs around 55,000 people in Jamaica, predominantly women. This number has risen from about 44,000 during the pandemic. At one point, projections suggested that outsourcing jobs could soar to 70,000 by 2025. However, the sector is now grappling with the aftereffects of remote work, the rise of artificial intelligence, and new legislation in the U.S. aimed at keeping jobs stateside.
“The Keep Call Centers in America Act could significantly impact us,” says Wayne Sinclair, president of the Global Service Association of Jamaica. He explains that the bill is still in its early stages and may take years to pass. “We have a long way to go before this even gets past the introduction stage,” Sinclair adds.
New Opportunities on the Horizon
With the outsourcing sector in flux, developers are turning their attention to other promising areas. Wood points to logistics, hospitality, and housing as sectors ripe for growth. “There are possibilities in terms of the transshipment developments taking place,” he explains. The tourism industry is also booming, with increasing demand for holistic tourism products that benefit the wider community.
For instance, a significant housing development is set to launch in Westmoreland, already approved and ready to go. This shift in focus reflects a broader trend, as developers adapt to the changing economic landscape.
The Real Estate Market: Current Trends
Despite the challenges, the real estate market has enough space to meet current demands. Sinclair believes there’s no immediate need for additional office space, given the existing excess capacity. Meanwhile, Mark Kerr-Jarrett, managing director of Barnett Limited, reports that his technology park in Montego Bay is nearly fully tenanted. “Occupancies are good,” he states, although some decline was noted during the pandemic.
Kerr-Jarrett is also planning the Barnett Logistics and Distribution Centre at North Bank, aiming to position Montego Bay as a regional hub for logistics. “Instead of everything being distributed from Kingston, it can be distributed out of Montego Bay,” he explains, highlighting the strategic advantages of the area’s infrastructure.
A Bright Future for Construction
Tourism is expected to be a major driver of construction in the coming years. The Jamaican government has announced plans for six new hotels, totaling 5,600 rooms, which will inject US$2.5 billion in foreign direct investment and create 10,000 jobs. Additionally, the construction of 1,000 houses for hotel workers is set to commence.
The construction sector, which has faced a downturn post-pandemic, is showing signs of recovery. Recent reports indicate a growth of 1.7% in the June quarter, contributing significantly to the nation’s GDP.
As developers shift their focus and adapt to new realities, one question lingers: What will the future hold for Jamaica’s outsourcing sector and its impact on real estate development?