Kingston Properties plans to diversify in regional markets

Date: March 08, 2019

Kingston Properties revealed a brief overview and the ways moving forward for the business at its Analyst Forum, given by the Company’s Chief Executive Officer (CEO), Mr. Kevin Richards. He stated that, “KPREIT’s growth strategy centers around acquiring long term investment properties and improving rental income overtime.” The Company showcased the following highlights for 2018:

Kingston Properties (KPREIT) has grown exponentially over the last ten years, by continuing to diversify the territories in which they acquire properties, that is in mixed-use real estate investments in the United States, Cayman Islands and Jamaica.

Funds from operations increased as the focus was shifted towards the Jamaican and Caymanian markets, as both markets continues to perform well in income yield and capital appreciation.

Short term rentals in Florida led to a decline in some expense line figures, that is one year lease agreements which reduces certain tax expenses that are would be incurred. In addition, property management fees continue to decline as the services are done internally rather than outsourced.

KPREIT disposed of six condos in Florida, in order to reduce holdings in condos in South Florida and focus more on higher yielding properties in other markets such as Jamaica. In addition, a unit at the Loft II Condominium complex has gone into contract and the sale is expected to close in March 2019.

The Company, through a subsidiary, acquired a multi-story, multi-tenant and office building in New Kingston in October 2018. Mr. Richards mentioned that, “the purchased brings to a total of three properties held in Jamaica and that the building is fully tenanted with a wide cross section of tenants ranging from law firms, government agencies and a BPO firm. The property was acquired at a price of $435 million and was financed both by a senior secured loan facility with CIBC First Caribbean Jamaica and the net proceeds of the sale of condos in the US.”

 KPREIT’s CEO highlighted the following plans for 2019:

 To continue to eye and diversify into specific markets regionally, specifically Bahamas, Panama, Dominica Republic and Turks & Caicos. Management noted, “this is in line with the risks associated with the current locations of the investment properties and the possibilities of natural disasters that might affect those regions. Also, due to the saturation of condos in the market, bulk sales of units by developers from their inventory and the continuing hike in US interest rates by the Fed tend to dampens condo prices in South Florida.”

Continue to increase the level of leverage with prudent limits in order to fund the expansion of the Company’s property portfolio.

Spend approximately $50M on property improvements, majority towards the Grenada Crescent property and the Spanish Town Road Commercial Complex and a little towards the Tropic Centre property in the Cayman Islands.


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