Kingston Properties to double assets with buying spree
Published:Friday | January 3, 2020 | 12:16 AMSteven Jackson - Staff Reporter
Real estate investment trust Kingston Properties (KPREIT) expects to double its assets to roughly US$42 million by 2020 year end with acquisition of a series of properties.
“We are looking to completely double our portfolio from about US$21 million in size to between US$40 to US$42 million in assets,” KPREIT CEO Kevin Richards said in a Financial Gleaner interview. He said that the company wouldn’t just throw cash at properties but seek tenanted properties that meet its criteria of earning a net yield of 7.0 per cent or higher per annum.
KPREIT holds some J$2.9 billion, or US$21 million, in total assets as at September 2019. The company raised J$2 billion in its rights issue in November last year. The rights issue was aimed at giving the company additional cash, which, in conjunction with bank loans, would finance property acquisitions.
KPREIT announced last week that it acquired eight fully tenanted warehouse units in the Rosedale Warehouse Complex located in the industrial belt of the Cayman Islands. The company spent CI$1.6 million, or roughly US$1.9 million, on the property.
“What we will net on the warehouse is somewhere in the 7.0 per cent region,” said Richards.
The deal was in the pipeline for a while, but the company stated that red tape kept the deal from being finalised. The warehouse units are KPREIT’s second acquisition in the Cayman Islands, an economy projected to grow between three to four per cent per annum for the next two years. It also forms part of the company’s strategy to broaden its geographic reach as well as property mix, KPREIT states.
KPREIT stated that it will continue looking at additional properties in Cayman and Jamaica. It also expects to close a deal this month.
“We are in the due diligence process for another Cayman Islands property. But we are looking at other territories,” Richards said. “We are still staying in the commercial office space and warehouse, and will stick with our sweet spot and continue rationalising our Florida condos.”
KPREIT paid out US$450,000 in dividends for the financial year ending December 2019. It represented the highest ever for the company and equated to a dividend yield of 3.2 per cent, and with payment in US dollars, said Richards. He added that the yield was at least twice the Treasury bill risk-free rate of 1.57 per cent and is paid in US dollars.