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Pridco Raises Rents
Agency Needs More Revenue For Infrastructure
By MARIALBA MARTINEZ
September 18, 2003
Maritza Cruz, the Puerto Rico Industrial Development Co.s (Pridco) deputy executive director for finance, confirmed that Pridco has approved a rent increase on all new or renewed leasing contracts effective July 1.
Pridco Executive Director Milton Segarra hasnt made a public statement regarding the rent hike, but several sources in the manufacturing industry are concerned. "With the state of the economy as it is, increasing Pridco buildings lease rates doesnt seem to agree with the promises made by this administration to keep business costs to a minimum," said one source in the San Juan metro area who is facing a rate increase when his leasing contract expires.
"Pridcos rental fees hadnt been revised in 13 years," said Cruz. "Our rates werent in tune with Puerto Ricos real-estate market. Before July, the fees ranged from $1.75 per square foot to $4.75 per square foot. A group of appraisers prepared a lease-rate study for the entire island."
The new rates vary according to a buildings zone and height. The fees are highest for buildings in the San Juan metro area (Zone 1); lease rates in this area increased an average of 60%, from $4.30-$4.75 per square foot to $6-$8.45 per square foot. Zone 5, which has the lowest lease rates ($2-3.10 per square foot), comprises municipalities in the central mountain areafrom Las Marias to Comerioplus Loiza, Arroyo, Patillas, Maunabo, Vieques, and Culebra.
"For Pridco to continue building facilities according to market needs and demands, we needed to revise the lease rates," said Cruz. "About $50 million of Pridcos most recent $162 million bond issue will go toward infrastructure improvements and new construction. This is important because Pridco depends mostly on revenue from leases."
Over the past four decades, Pridco has acquired or constructed 31 million square feet of industrial space throughout Puerto Rico. Today, it has 25.4 million square feet, of which 86%, or some 22 million square feet, is occupied. Pridcos revenue from leases remained steady between fiscal years 2002 and 2003, at $49.9 million and $50.3 million, respectively.
This Caribbean Business article appears courtesy of Casiano Communications.