In its latest round of property acquisitions, Kingston Properties Limited (KPREIT) has acquired a 1.5-acre property in Cross Roads, St Andrew, which it intends to develop to house small-bay warehouse units for $75 million (US $495,933).

The acquisition was completed on October 11 and brings KPREIT’s owned property space to 428,625 square feet. This is relative to the 282,348 sq ft owned at the end of 2020 and 171,427 sq ft in 2019. It also nears the half-mark point of KPREIT’s target to own 1 million square feet by 2023.

KPREIT acquired a half-acre property on Dumphries Road in March, which was followed up with a 40 per cent acquisition in a 155 unit, multi-family property in Atlanta, Georgia. The company entered into an agreement to acquire preconstruction units of a mixed-use industrial development in the Cayman Islands called Gum Tree 5. Some of these acquisitions were funded by a $700-million (US $4.63 million) bridge loan it obtained from Victoria Mutual Investments Limited.

When questioned by the Jamaica Observer about its additional public offering (APO), KPREIT CEO Kevin Richards explained that he is awaiting feedback from one of the regulators. The regulators in this scenario would be the Jamaica Stock Exchange (JSE) and Financial Services Commission (FSC). KPREIT gained approval from its shareholders in February to double its authorised share capital to two billion units to facilitate the APO. It currently has 677.66 million issued shares, while its stock price is at $10, up 38 per cent year to date.

“As we had indicated at our last annual general meeting there were four deals in the pipeline at the time, three have closed [this one being the third] and the fourth should close in early November. We are always looking at deals and, if the right opportunity arises before year end we will close on it,” said Richards about the company’s pipeline for the remainder of the calendar year. KPREIT had 38 per cent of its investment properties in the Cayman Islands, 15 per cent in the USA, and the remainder in Jamaica up to the end of June.

Richards further noted that the company isn’t really exposed to the Bank of Jamaica’s rate hike as its only Jamaican dollar loan is the bridge loan which is fixed at 6.4 per cent for 13 months. The US dollar loans the company has in Jamaica are all based on the London Inter-Bank Offered Rate (LIBOR), which has been trending down over the last year. KPREIT’s loans as a percentage of its total asset base at the end of June was 30 per cent.

Though there has been a burgeoning explosion of properties to the business outsourcing sector, Richards stated the company is focusing more on industrial properties and other developments.

“We remain focused on acquisition and development of more industrial properties based on the growth in e-commerce and logistics; however, our Dumfries Road property will be developed as a green/sustainable office building.”

KPREIT reported a 59 per cent increase in rental revenue to US$1.44 million, with it generating a net profit of US $927,202 ($140.22 million).

— David Rose