PRIME Minister Dr Andrew Holness says the Government is open to drafting a law for real estate investment trusts (REITs), but any tax breaks would have to generate enough new revenue to offset what the Treasury gives up over the long term.

Holness was responding to a call from Kingston Properties Limited (KPREIT) for a legal framework that would make it easier for pension funds and individual investors to put money into income-producing property. The company made its case on Tuesday at the opening of its Rousseau Road Commercial Complex in Kingston, its first development built from the ground up.

“…at this time you would have to be very careful how we give up certain tax revenues. Not that we wouldn’t create fiscal incentives for it, but we would have to have a very strong guarantee that whatever fiscal incentive regime we create, it is going to be offset by revenues that are coming in,” Holness said, adding that the gains would have to hold over the long term.

“So that is something that we will consider. And I want to give you the assurance that the government is not opposed to setting up, as the leader of the Opposition calls it, bespoke legislation for REITs. Nevertheless, I do believe that there are improvements in the current regulatory environment that can be quickly implemented that would assist real estate development on a large scale,” he continued.

A REIT gives investors a share of the income from properties such as warehouses and offices without having to buy a building themselves.

Kingston Properties already offers that exposure through its listed shares, but Chairman Garfield Sinclair said the company operates under general company and securities laws that were never designed for businesses set up to hold property and distribute the income to thousands of investors.

Sinclair wants a law that would require REITs to pay out most of their income and have that income taxed once, in the hands of investors. He also called for standards on governance, property valuations, borrowing and disclosure, arguing that a regulated source of long-term capital could make clean titles, planning approvals and adequate insurance conditions for financing.

“When development is financed through regulated vehicles, compliance becomes a condition of funding rather than an afterthought. Legislation is therefore not only a capital markets reform, it’s a lever for more compliant and resilient development across Jamaica,” Sinclair said.

“I want to be clear, however, this is not a request just on behalf of Kingston Properties. A proper framework would invite new competitors and we would welcome that. It is a request on behalf of the entire market and of every Jamaican who should be able to own a share of this country’s real estate. We, together with our colleagues right across the industry, stand ready to work with the ministry, Financial Services Commission, and all of the Government members in order to get this done. And I implore you to give us a shot at helping you do this,” he added.

Opposition Leader Mark Golding also made a case for taxing investment income once, though he pointed to a different approach. He cited the Caricom tax agreement as a model under which income is taxed where the enterprise earns it, with shareholders in other member states receiving the distribution without a further layer of tax. Golding said Jamaica should look at such changes over the medium term to improve its competitiveness, while acknowledging that the fallout from Hurricane Melissa and successive quarters of economic contraction make it a difficult time to give up revenue.

Meanwhile, Holness said Jamaica’s existing securities framework already accommodates instruments backed by real estate and that some regulatory changes could be made more quickly. He raised the possibility of requiring REITs to distribute 90 per cent of their profits and said he would consider how those distributions are taxed where the trusts invest in areas of strategic national interest, such as logistics facilities that support the port.

The Prime Minister also suggested that REITs could give owners of idle land a way to retain a financial stake while making the property available for development. An owner could take shares in a trust, he said, and earn a share of the income once the land is put to use. Holness linked that idea to separate plans for legislation to designate business development districts, including tourism districts.

At 11 Rousseau Road, Kingston Properties has built 14 modular units, each with ground-floor warehouse space and an office. The company designed the complex for businesses such as wholesalers, distributors, small manufacturers and courier operators that need to store stock and run their offices from the same address.

Rousseau Road gives Kingston Properties a new way to grow its rental income. The company has typically bought existing buildings, then raised rents, refurbished space or brought in new tenants. At Rousseau Road, it took a greenfield project and built 14 units it can now bring to the leasing market. The company identified spending on the development as one of the reasons group assets rose to US$98.17 million at June 30, up from US$88.84 million a year earlier.

Jamaica remained the largest source of rental income, contributing US$1.66 million, or about 45 per cent of the group total, in the first half of 2026. The Cayman Islands contributed US$1.27 million, while rental income from the United Kingdom rose 78.5 per cent to US$791,394 as properties acquired in 2025 began contributing more. The December purchase of a property in Dartford, England, together with rent increases in Jamaica, helped lift June-quarter rental income by 15.3 per cent to US$1.90 million.

Borrowing has also risen as the portfolio has expanded. Loans payable reached US$39.78 million at June 30, up from US$33.84 million a year earlier, and net finance costs for the first half increased to US$1.13 million from US$941,010. Over the same six months, operating income before other gains rose 28.8 per cent to US$2.61 million, while total comprehensive income fell about 10 per cent to US$1.47 million. The prior-year period benefited from property valuation and disposal gains, and the group recorded a tax charge this year after receiving a tax credit in the comparable period.

— Adittional reporting by Billeane Williams