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KPREIT mulls venture into property development

Published:Friday | December 28, 2012 | 12:00 AM
Fayval Williams, executive director of Kingston Properties Limited. - File

Sabrina Gordon, Business Reporter

Kingston Properties Limited (KPREIT) is considering a foray into real estate development.

The company, in what it said is a testing of the market, has placed advertisements inviting persons to apply for the purchase of two bedroom houses in Waterworks, Westmoreland.

"There is a divergence in the housing stock - the upper segment is taken care of; the challenge is with the affordable segment - so we are looking at bringing solutions to the market that people can afford, feel comfortable to buy and make a return," said Fayval Williams, executive director of KPREIT, Jamaica's first and only real-estate investment trust.

"So we are doing a bit of research to see the kind of interest we will get."

Williams said the plans are in the preliminary stages and that KPREIT has not ruled out partnering with other investors.

KPREIT's business model rests on actively acquiring and managing real estate properties with the aim of generating income and realising capital appreciation. The company was established four years ago and listed on the Jamaica Stock Exchange in August 2008.

It initially started out investing in seven units of the 55-unit luxury, business-type hotel in Port-of-Spain, Trinidad, called the Carlton Savannah.

But, with several delays in the completion of that project, KPREIT in 2009 sold the units and went on the hunt for other opportunities.

Its current portfolio of assets include a 26,000-square-ft office/warehouse building on Hagley Park Road in Kingston and 19 units in a condominium apartment in downtown Miami, Florida, with a square footage of 19,029 - both acquired in 2010. The Kingston-based warehouse is 100 per cent leased to a US-based company, while the condominiums are fully tenanted.

Since then, KPREIT has acquired another 47,865 square feet of fully tenanted office/warehouse building located on Red Hills Road, bringing total square footage under management to 89,957.

Its assets are worth J$949 million at book value.

In its nine-month financial results, ending September 2012, KPREIT reported revenue of J$67.7 million, an increase of 109.8 per cent over the corresponding period last year when it posted J$32.3 million.

The increase in revenues is attributed primarily to rental and maintenance income with the addition of the Red Hills Road property.

Profits after tax amounted to J$10.7 million in the nine-month period, compared to J$7.5 million for the previous period.