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KPREIT on the hunt for distressed properties

Real estate investment company Kingston Properties Limited, known as KPREIT, is on the hunt for distressed properties whose owners may be finding it difficult to sustain their investments under current economic conditions.

CEO Kevin Richards says the expectation is that the relatively high interest rate regimes in play in North America and Jamaica will continue for the rest of this year, and Kingston Properties considers it likely that properties will be placed on the market for sale as a result.

Richards says his company has a five-point plan that calls for the monetising of more of the assets in its portfolio and shifting to a more dynamic asset management strategy. The company will be seeking double-digit returns on cash-generating properties, and looking outside the hurricane belt for investment properties.

Its target is to get to US$75 million in portfolio assets this year, up from the US$56 million reached in December, through loan-backed acquisitions.

“Once we do that and continue to do well, we will continue to pay dividends consistently and try to make them as competitive as possible, so that our shareholders are happy,” Richards said on an earnings call.

For year ending December 2022, Kingston Properties made a profit of nearly US$3.8 million, up from US$3.02 million at FY2021.

Operating revenue climbed 12 per cent in the year to around US$3.34 million.

Richards said the company is confident it can grew further this year, citing cash resources of US$4.7 million and its capacity to borrow as much as another US$13 million to US$15 million.

“So we could spend between US$18 million to US$20 million in new deals to generate more profits for our shareholders,” Richards said, noting that the Gum Tree development in the Cayman Islands is nearing completion, while work is about to start on the Rousseau Road mini-warehousing complex, and the prospect of other projects that will be announced soon.

Richards says the Rousseau Road complex will boast 14 small-bay warehousing units. It will be Kingston Properties’ first greenfield project, and is being pursued as a joint venture with Relmac Construction.

The development, which is awaiting approval from the Kingston and St Andrew Municipal Corporation, is projected for completion in March 2024, he said.

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