Kingston Properties closes deals in Miami

Wednesday, September 03, 2014

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KINGSTON Properties Limited (KPREIT) has closed the sale of four of its condominium units in Miami for US$980,000 ($110 million).

The deal, which left the real estate investment trust with 15 residential units in the same building, gave the company a 69.5 per cent return on its investment made in 2010.

Now KPREIT is re-investing the proceeds in a 19-unit residential apartment building (totalling 15,000 square feet) in another area of Miami.

It paid US$1.9 million for the new property, which is located in Little Havana — the Cuban and Latin American centre of Miami which is "beginning to see a renaissance".

"It will be our first stand-alone purchase," KPREIT's Executive Director Fayval Williams told the Business Observer in an interview earlier this year. "The ownership structure is different in that we will be the landlord, whereas in condominiums the association dealt with [maintenance]."

The plan is to collect rent from tenants of the apartment building over the next three to four years, over which time property prices are expected to rise.

Rental yields are currently at roughly seven per cent per annum in addition to three per cent per annum on capital appreciation of the premises.

"So over the holding period of four years we expect to get about 35 per cent return on investment," she said.

Williams reasoned that the US market offers greater returns than similar investments in Jamaica.

"Jamaica will not offer those returns on an existing building because the capital appreciation is not as robust as in the US," she said.

The real estate investment trust's portfolio also includes roughly 26,000 square feet of office space on Hagley Park Road in Kingston, Jamaica, and some 48,000 square feet of office/warehouse space on Red Hills Road.




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