KPREIT remains bullish in property markets

Date: May 28, 2019

Kingston Properties Limited (KPREIT) held its Annual General Meeting today which was hosted by the Company’s Chairman, Mr. Garfield Sinclair. The meeting began with the usual welcoming and introductions which was subsequently followed by the Chief Executive Officer’s (CEO) report.

“2018  was a year of transition. It was marked with the continuation of the strategy to reduce our holdings in condominium units in South Florida and focus more on higher income yielding properties in other markets such as Jamaica and Cayman,” stated by CEO, Mr. Kevin Richards. For the financial year under review, the Group recorded a 4% increase in rental income to $204.1 million and net profit of $34 million. Mr. Richards mentioned that, “The modest growth in rental revenue is attributed to the reduction in the number of condo units held during the year as well as higher vacancy in the units held at the W Fort Lauderdale during the summer months.”

Mr. Richards further highlighted that, “in 2018, we completed the acquisition of a multi-story office building in New Kingston for a purchase price of $435 million which moved our holding in the office rental space from 7 % in 2017 to 27 % in 2018.” This acquisition is in line with the Company’s strategy of diversifying their holdings in other markets and asset sub-classes. In addition, during the year, the Company sold six condo in Florida, thus reducing holdings in the residential sub-market.

Notably, average occupancy during the year was approximately 94% regardless of higher than anticipated vacancy in the condo-tel property in Florida and the usual vacancy levels from tenant turnover.

Looking ahead:

  • The US portfolio will continue to transition as the Group plans to continue to capitalize on the gains that have been made on some of the units in the portfolio and divert those proceeds to further build shareholder value in other properties, while also reducing Group’s debt.
  • Remain bullish on the property markets in both Cayman Islands and Jamaica.
  • With the acquisition of the New Kingston property, holdings in both Jamaica and the Cayman Islands represent approximately two-thirds of total property portfolio and we expect both to generate more than 70% of total revenue in 2019.
  • 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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2019-05-28T19:30:41+00:00