May 15, 2018
This year’s Kingston Property Limited (KPREIT) Annual General Meet (AGM) was held today under the theme, “ Ten years of increasing shareholders value”; and that is exactly what Chairman, Garfield Sinclair, believed the firm has achieved.
As noted by CEO, Kevin Richards, “ back in 2008 our portfolio was valued at J$314 million and at the end of 2017 we are roughly about J$2.5 billion.” This represented a compounded annual growth rate of about 26%. To silence critics who believe that depreciation of the Jamaican dollar accounted for a great portion of this return, Mr. Richards provided the USD comparative, stating “ we had started with US$3.9 million in 2008 to end 2017 with just under US$20 million.” Excluding the impact of currency movement, KPREIT over the last ten years recorded a compounded annual growth rate of 19.92%.
Realizing the obvious disparity between the company’s intrinsic value and its market value, last year management set out to narrow the gap. The company had a stock split in 2017, in an effort to increase trading volumes. Chairman, Sinclair, was quick to point out that for 2017, the stock price increased by 242%. However, Mr. Richards did not indicate whether he believed the stock was fairly valued at this moment.
KPREIT during the last financial year acquired a multi-tenanted mixed-use property on the fast-growing Seven Mile Beach area in the Cayman Islands. A break out of the geographical location of the firm’s property is as follows:
- 37% Jamaica
- 13% Cayman
- 50% USA
- In terms of operation, 56% is residential, 31% is in a warehouse while the remainder is split between office space and retail.
KPREIT had diversified its geographical risk over the last financial year, while at the same time, increasing its financial risk. In 2017, the firm increased leveraged property acquisition comprised primarily of new bank loans totaling US$3.65 million.
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