Kingston Properties going green
R eal estate investment trust Kingston Properties Limited, also known as KPREIT, is going green to cash in on the growing climate change consciousness. Of the 18 properties in its portfolio, Kingston Properties is retrofitting nine commercial...
R eal estate investment trust Kingston Properties Limited, also known as KPREIT, is going green to cash in on the growing climate change consciousness.
Of the 18 properties in its portfolio, Kingston Properties is retrofitting nine commercial buildings in its hunt for Green Globe certification by year 2024. The other nine are being sold off.
“We did the studies and we noticed that rents have actually increased when there is green certification or [implementation of] some sort of sustainability model,” CEO Kevin Richards told the Financial Gleaner in the wake of the company’s annual general meeting this week.
“If you are able to institute more energy-efficient features to a building, then it can cut your maintenance costs,” he said.
As part of the certification process, Green Globe typically sends its assessors to audit properties. Richards said certification would cost less than US$10,000 per building.
“We’re also exploring locally, because NEPA (National Environment & Planning Agency) does some certification, too; but since we are operating internationally, we want the Green Globe standard as well,” Richards said of the company which owns residential and commercial real estate in Jamaica, Cayman Islands and Miami.
The buildings targeted under the programme will undergo work on air-conditioning and water-capture systems.
“People are slowly adapting,” he said of tenants occupying ‘green’ buildings. “Where we can show them that it can actually save money, then that is where the appeal is,” Richards said, citing as one example, the impact that an efficient, proper cooling or air-conditioning system can have in driving down electricity costs.
Kingston Properties is about 80 per cent complete on a project to retrofit the air-conditioning system at its Grenada Crescent building in the New Kingston business district. The commercial property will also be fitted with a rainwater-harvesting system, as will eight others in the company’s portfolio, to include, he said, the Red Hills Road, Ashenheim Road and Spanish Town Road properties. KPREIT’s holdings in Cayman will undergo work on the air conditioning and rainwater-harvesting systems, the CEO said.
The nine properties not included in the green certification project are all residential real estate that are being disposed of. One property is under contract for sale and the rest are being marketed. The condo properties are located in Florida.
“Within a year we should be entirely out of the condo portfolio but certainly by the end of September we will have disposed of about 50 per cent,” Richards said. “Now that everybody is moving to Florida the market for condos has rebounded and we want to be ahead of the game if there is an uptick of interest rate, which would affect that market,” he said.
Earlier at the annual meeting, Richards told shareholders that the company’s Jamaican portfolio would be focussed on commercial holdings, and that KPREIT was in the process of acquiring other assets here that would be targeted for warehousing and logistics. In the United States, the company is trying to acquire a multifamily property.
“The first in a series of announcements will come in another week,” he said.
Under the current rebalancing of the company’s portfolio, KPREIT is targeting a mix of 65 per cent for value-added properties, measured in square footage, where it buys and retrofits structures, up from 43 per cent; core-earning properties, which are fairly stabilised with little need for retrofitting will account for 20 per cent; and opportunistic assets such as the recently acquired Dumfries Road property in New Kingston will account for 15 per cent, Richards said.