Kingston Properties Limited (KPREIT), a property management and development company, has acquired two buildings at 6 Duke Street and 8-10 Duke Street in Kingston through a sale and leaseback arrangement with Victoria Mutual Building Society (VMBS) and its affiliate VM Real Estate Holdings Limited.

The properties, totalling nearly 60,000 square feet, bolster KPREIT’s local market presence, raising its Jamaican holdings to 43.5 per cent of its total portfolio.

Prior to this acquisition, KPREIT managed five properties and a 1.5-acre parcel of land slated for future development within its Jamaican portfolio, which primarily consists of warehouse and office buildings. The newly acquired properties are fully leased, with 6 Duke Street serving as KPMG’s office and 8-10 Duke Street housing VMBS’s downtown branch.

“We’ve always targeted sale and leaseback opportunities especially with high quality tenants. Additionally, we believe real estate in downtown Kingston is opportunist and there is untapped value there,” CEO Kevin Richards told the Jamaica Observer regarding the property purchases.

The total purchase price has not been disclosed, but Richards said that the acquisitions were funded through a mix of debt financing and sales proceeds.

“We will disclose the cost at a later date,” he added.

The acquisition comes months after KPREIT secured US$5 million of J$781 million in financing from FirstCaribbean International Bank. The company, which made the disclosure in its recently released second-quarter report, only said the loan would be used for “the purpose of acquiring an investment property”.

The loan matures in 15 years and is at a fixed rate of interest of 5.98 per cent for the first two years and Secured Overnight Financing Rate (SOFR) — which is a benchmark that financial institutions use to price loans for businesses and consumers plus 3.5 per cent thereafter. The SOFR is at a floor of 3 per cent.

In line with its plan to acquire larger, higher-yielding properties, KPREIT announced that it has offloaded four additional commercial units at the Tropic Centre in Cayman Islands, bringing the total units sold to nine out of 10. The final unit is expected to close in September. This transaction has shifted KPREIT’s portfolio composition, with Cayman Islands holdings now representing 49.6 per cent of the total portfolio.

The trust has been vocal about its plans to sell certain assets to free up liquidity for new acquisitions. Outside of Jamaica, the property management company has its eyes set on acquisition in the United Kingdom.

“The UK acquisition is in train. We’ve identified a target and moving towards advanced due diligence,” Richards said in providing an update on the matter.

The new acquisition marks a significant step towards KPREIT’s goal of expanding its geographical footprint and reaching its goal of US$100 million in assets under management which it expects to hit in 2025.

Its latest financials showed that the company had grown in value by 47.8 per cent, reaching US$57.6 million at the end of June compared to US$39.0 million in investment properties for the previous year. Total assets under management also rose by 25.9 per cent to US$76.3 million.

The new acquisition also comes at a time when the company is seeing substantial financial growth, reporting a 48 per cent increase in profit for the second quarter of 2024 and a 40 per cent rise in revenues, largely driven by the addition of units at the Grand Harbour Commercial Centre (GHCC) and increased rental rates across its portfolio.