The latest acquisition by Kingston Properties Limited, could boost the real estate investment trust’s (REIT’s) revenue by close to two-thirds.

Importantly, it improves the prospects for the company being able to pay dividends.

“One of the functions of a REIT is to provide investors with dividend,” said Kingston Properties executive director Fayval Williams. “We now have a mixed portfolio that will generate cash.”

The company notified the Jamaica Stock Exchange (JSE) last week that it had completed an agreement with Henkel Jamaica to purchase its Red Hills Road property for US$2.4 million ($205 million). The property consists of 47,865 square feet of office and warehouse space across multiple buildings.

Williams declined to say how much rent would be collected from the tenants who now have a long term lease with Kingston Properties, but said it was at market price.

Checks by the Business Observer showed that rental in the area range from US$6 to US$7 per square foot each year, which would place rental income at $25 million to $29 million.

Kingston Properties generated $32.3 million in revenue for the nine months to September 30, 2011 — which translates into $43 million annualised. That was generated from its 26,000 square feet of commercial property located on Hagley Park Road in Kingston and 16,092 square feet of residential condominium space (19 units) in downtown Miami, Florida.

It is not yet clear how it will benefit the company’s bottom line, which was $7.5 million for the nine months ending September 30, 2011, up from $7 million during the comparative period in 2010.

The purchase did however result in Kingston Properties using up the funds (approximately $407 million) it raised in 2008 to buy properties.

Williams said that issuing additional shares is still an option for the company, already listed on the JSE, while she says the board will continue looking at possible partnerships and diversification of its portfolio across asset type and tenant base.