KPREIT creates new subsidiary
Kingston Properties Limited (KPREIT) has established a subsidiary in the United States, suggesting that the company plans a deeper foray into the investment market there.
The company, a nascent real estate investment trust, has just wrapped up acquisition of 19 apartments in Miami, sees its new operation, Kingston Properties Miami LLC, not only as a vehicle for asset purchase, but potentially to raise cash for investment.
"KP believes that creating a subsidiary in the US makes sense as it allows the company the flexibility to tailor portfolio of properties specific to the US in order to facilitate the needs of local investors," said Fayval Williams, executive director of KPREIT.
"In addition, there are other corporate benefits that flow from being a US entity. Of significance as well, is the access to a much larger capital market," she said.
KPM is a limited liability company incorporated in Florida, where KPREIT in March committed to a purchase of 19 units in a Miami condominium complex at a cost of US$2.7 million (J$243 million).
The trust is also acquiring warehouse space in Kingston as it attempts to build out a portfolio of assets.
Williams would not disclose the investment in the new subsidiary, nor its budget, but suggested some of its functions might be outsourced.
"The level of investment will be dictated by the needs as properties are brought on board and staffing will depend on the level of property investment activities in this subsidiary going forward," she said.
"In the early days, the company will utilise external professionals, for example, property management companies."
KPREIT's move to take a foothold in the US market is driven by what Williams said are signs of recovery in real estate markets there, "presenting opportunities for solid cash flow and capital appreciation potential," she said.
The establishment of other subsidiaries elsewhere in the region is not being ruled in or out by the company.
"As opportunities present themselves, we will assess them and make the appropriate decision then," Williams said.