Kingston Properties Limited (KPREIT) still has plans to further diversify its investment mix with the addition of more industrial and commercial properties, even after finalising another property acquisition on Spanish Town Road in Jamaica.

Last Friday the real estate investment company acquired a 2.7-acre property consisting of approximately 23,000 square feet of warehouse and office space for a consideration price of $215 million. According to a release, this is the company’s fourth acquisition in 2021 and its second one on Spanish Town Road, which CEO Kevin Richards describes as “a main thoroughfare for industry and commerce in Jamaica”.

“The thrust remains to acquire more properties in the industrial and warehousing space, driven largely by the growth in e-commerce and logistics businesses over the last few years,” he continued.

Within the calendar year KPREIT acquired two properties in Jamaica: A mixed-use office building in New Kingston and a 1.5-acre property in the Cross Roads vicinity. It has earmarked the latter for the development of small warehousing units.

In July, the company entered into a joint venture with Apex Development Group LLC and Treevita Holdings LLC to purchase of a 115-unit multifamily property in Atlanta, Georgia, USA. KPREIT also entered into an agreement to purchase three pre-construction commercial units for mixed-use industrial development in the Cayman Islands in September.

With regard to KPREIT’s most recent acquisition, Richards told the Jamaica Observer: “It’s already tenanted; there’s an occupant in the space. It is going to be leased by the vendor for a period of time, but it is something that we haven’t made a decision as to whether we will develop it or we will continue to lease it.”

He said, however, that the property on Spanish Town Road has the capacity for additional development of square footage for warehousing and industrial use and that the company is now weighing its options. Richards also shared that funding for the acquisition of the property came from a combination of the company’s cash resources and proceeds from a $700-million loan it got from Victoria Mutual Investments Limited in June this year.

Though refusing to disclose how much he estimates the current acquisition will add to the company’s revenue, Richards said the purchase takes KPREIT a step closer to achieving its strategic objective to increase its equity to $10 billion and to increase the footprint of properties under its ownership or management to one million square feet by 2023.

As the company looks to increase its holdings in industrial and commercial properties, Richards said the company’s search is not restricted to Jamaica.

“We’re looking everywhere across the island and in other jurisdictions as well, because we’re acquiring properties in the Cayman Islands…We are looking at opportunities in the US, as well, in the industrial space.”

At the same time, the company also announced the disposal of the last three condominiums at the Lofts II in Miami, Florida, for a consideration of US$888,000. The company had bought 19 units at the property in 2010 and began disposing of them in 2018. It sold its last unit on Friday.

The company has not given up on the Florida real estate market as it still has condominiums at Opera Tower in Miami and The Residences at W in Fort Lauderdale.

“With our joint venture partners we are looking at opportunities in the multifamily space in Florida, Georgia and North Carolina,” Richards informed Business Observer.

Looking ahead in 2022, the CEO said the company has “an active pipeline…of properties slated for development”, referring to the building on Dumfries Road, New Kingston; the property in Cross Roads; and the pre-construction units in the Cayman Islands.

“So we’re in construction phase. We’re adding another element to our business operation because what is core for us is acquiring value-added opportunities, whether it’s in office or industrial or multifamily space. So that is our core business and that’s going to remain the majority of our business. But we’re now adding a portion of our portfolio dedicated towards greenfield or development ground-up types of projects, which won’t constitute more than 10 per cent to 15 per cent of the portfolio,” he explained.

Richards also pointed out that by keeping development projects between 10 and 15 per cent the company ensures reducing its exposure to risk while generating cash to increase shareholder value.

For the nine months ended September 30, 2021, KPREIT reported a 50 per cent year-on-year increase in rental revenue to US$2.2 million, while net profit amounted to approximately US$1.4 million in 2021 versus a profit of US$70,154 in the previous year.