Friday 25 September, 2020

Kingston Properties buys Cayman complex

Kingston Properties CEO Kevin Richards.

Kingston Properties CEO Kevin Richards.

Kingston Properties Limited (KPREIT) has acquired eight tenanted warehouse units in the Rosedale Warehouse Complex located in the industrial belt of the Cayman Islands.

The purchase was for a consideration of CI$1.6 million ($259.6 million).

The property maintains a solid tenant base comprised of companies engaged in the construction and distribution industries,” company directors stated in their release on the Jamaica Stock Exchange on Friday, December 27.

The acquisition represents KPREIT’s second purchase in the Cayman Islands.

Directors note that the Cayman Islands is an economy projected to grow between three and four per cent per annum for the next two years.

The area, they said: “is part of our strategy to continue to broaden our geographic reach as well as diversify the mix of property types in our portfolio.”

In November 2019, the company raised $2 billion via a new renounceable rights issue for the purpose of expanding its real estate portfolio.

Formed in 2008, Kingston Properties Limited has been geographically diversifying with good results, and intends to continue to do so, according to CEO Kevin Richards.

He said the company’s medium to long term strategy being executed will include the sourcing of funds for continued growth, while finding a shield for KPREIT from foreign exchange volatility.

The company has also changed its functional currency to the US dollar.

A third prong of the strategy being pursued is to quadruple square footage under management to one million square feet within the next three years.

Current square footage under management is 153,000 of which 36 per cent is residential, 27 per cent office, 30 per cent warehouse and industrial and seven per cent retail.

Investment properties up to November were valued at $2.7 billion.

Richards said the company’s core investment strategy for the rights offer was focused on office and warehouse properties in Jamaica and in the Cayman Islands.

He commented, “We believe that our experience in these markets and investing in these asset sub‐classes will provide us with the best medium to long term risk adjusted returns.”

The prospectus indicated, “We have identified as possible acquisition targets a compelling portfolio of properties in the Cayman Islands covering the fast growing Seven Mile Beach stretch; the re-emergent George Town office district; and the ever-expanding industrial area with close proximity to the recently expanded and upgraded Owen Roberts International Airport.

“In Jamaica, we continue to focus on commercial real estate opportunities, especially in the warehousing sphere, where we have experienced the greatest demand,” it noted.

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