KPREIT seeks extra-regional acquisitions
Real estate investment trust Kingston Properties Limited (KPREIT) is eyeing properties in strong economies and away from the hurricane belt as it continues the hunt for investment properties.
CEO Kevin Richards wants KPREIT to hit US$100 million in assets under management (AUM) by 2025 and has expanded the search for distressed properties to markets outside of the Caribbean.
“We are investing in Jamaica and the Cayman Islands, but those islands are susceptible to hurricanes, so we are expanding our geographic region. There are opportunities that we are looking at in markets far and wide, and we hope to make some announcements about those acquisitions this year,” Richards said during an earnings call hosted by the company recently.
KPREIT currently has AUM of US$71, but Richards hopes to push that number up to US$80 million at the close of 2024 and to gradually climb to US$100 million in 2025.
The CEO plans on leveraging KPREIT’s brand including the development of strategic partnerships or approaching the capital market to hit its target.
“We have long-standing relationships, but we’ve also developed so many new relationships over the last two years. Investment opportunities come to us all the time, we [want] just to evaluate each investment opportunity and see if it fits with our metrics,” Richards said.
Last year, KPREIT pumped roughly US$15 million into the acquisition of Grand Harbour Shoppes in the Cayman Islands, making it the single-largest purchase to date for the company.
The company announced the acquisition of 36 units in the Grand Harbour Commercial Centre along with an adjoining parking lot last September, but the purchase price remained undisclosed.
The acquisition was largely financed through a loan from the RBC Royal Bank in the Cayman Islands, according to notes adjoining the KPREIT’s recently released audited financials for FY 2023.
KPREIT now has 11 properties under management across three main territories: the US, Jamaica and the Cayman Islands.
Collectively, it has buildings spanning 462,000 square feet; but the company, which focuses on managing value-added commercial properties, also owns 112,000 square feet of lands slated for development.
Grand Harbour’s acquisition increased the value of investment properties held by the group to US$59.1 million for the financial year ending December 2023, 40 per cent higher than the property investment value for FY 2022 at US$40.2 million.
“Aside from the acquisition, the value of our existing assets has also improved this year,” chief financial officer of KPREIT Andray Francis said.
At the close of the year, KPREIT’s group profit bumped up 22 per cent year on year to $4.6 million on rental income which also climbed 14 per cent year on year to US$3.8 million.
On Tuesday, KPREIT stock opened at $7.01, 6.53 per cent down on last Friday’s closing price of $7.50.
Richards maintains that the stock is extremely undervalued.
