Real Estate

(Photo: Facebook @kingstonproperties)

Kingston Properties to hold EGM ahead of APO

(Photo: Facebook @kingstonproperties)

On February 23, shareholders of Kingston Properties Limited (KPREIT)  will meet in hybrid format to consider matters including a doubling of the  authorised shares  in the company and also the possibility of pursuing an additional offer of common shares in the capital of the company.

The first order of business will be to consider the resolution that the shares of the company be increased from one billion to two billion units.

The other resolution for shareholders to consider is that of authorising the raising of additional capital for expansion via the offer of additional public shares.

Changing with the times

Earlier this year, Kevin G Richards, chief executive officer, indicated that KPREIT was pivoting in line with changes occurring in the real estate industry.

Kingston Properties CEO Kevin Richards (File photo)

In a letter to shareholders published on the Jamaica Stock Exchange on January 5, Richards said the company would be looking more to investment in warehousing and logistics in the future.

He said , “The pandemic has created paradigm shifts in the way businesses operate and will continue to quicken the pace of advancements in digital and other remote interaction. 

“We continue to believe that we can ‘future-proof’ our operating model by focussing on warehousing and logistics assets.”

(File photo)

He said the company would be engaging in strategic partnerships to achieve  core objectives of reaching $10B in equity and having 1,000,000 square feet of property under management or control by 2022. 

The company, he said, will be returning to the capital markets in 2021 to “take advantage of more attractive assets that meet our risk-adjusted return threshold.” 

Richards said that Kingston Properties decided at the onset of the pandemic, even in advance of any reported COVID-19 cases in Jamaica, to focus on preserving cash.

“We continue to believe that we can ‘future-proof’ our operating model by focussing on warehousing and logistics assets.”

— Kevin G Richards, CEO, Kingston Properties

‘Future-proof’ financial performance

He reported that the company, year to date, has  experienced a 40 per cent improvement in rental revenue Year On Year (YOY) and greater efficiency from the deployment of the Group’s cash resources demonstrated by Net Operating Income (NOI) and EBITDA increasing by 82 per cent and 67 per cent YOY respectively. 

“All of the attributes of a REIT are in our DNA, so we focussed on our ability to generate cash from operations, resulting in an 82 per cent year on year improvement in Funds From Operations (FFO).

KPREIT, he said, has maintained solid occupancy levels in excess of 90 per cent throughout the year, as well as a similar level of collections during the period. 

The company also acquired a fully tenanted office building in Georgetown, Cayman Islands and arranged financing for that acquisition in the midst of that jurisdiction’s lockdown. 

Harbour Centre in the Cayman Islands. (Photo contributed by Kingston Properties)

Additionally, it acquired an 88,000 SF value-add industrial property in close proximity to the ports in Kingston Jamaica. 

Notably, the CEO said, the company has also repriced the bulk of bank borrowings to rates from as low as two per cent per annum to just under four per cent per annum.  

It has also reduced its Miami condo portfolio further allowing it to eliminate debt with  bankers in the US and increase cash holdings for new property acquisitions or distribution to shareholders. 

Midblock Condominiums in Miami, Florida, USA (File photo)

Richard said directors remained  confident that “global monetary policies will remain accommodative, which augurs well for the future stability of certain asset classes like real estate.”