[ad_1]
Kingston Properties Limited (KPREIT) bought another commercial property in the Cayman Islands as it focuses on serving businesses during a period of global uncertainty.
“This marks Kingston Properties’ fifth and largest investment in the Cayman Islands,” said the group, which holds US$40 million worth of properties across the group up to June 2023.
In a notice via the Jamaica Stock Exchange, KPREIT said it closed on the acquisition of 36 commercial units totalling 37,276 square feet in the Grand Harbour Commercial Centre (GHCC) along with an adjoining parking lot.
GHCC is said to be located in Prospect, one of the fastest-growing communities in the Cayman Islands and is located at a critical intersection connecting the western part of the island to the eastern region.
“The units are fully tenanted and occupied by a variety of tenants ranging from education facilities, restaurants, hospitality and medical service providers, a supermarket, and consultancies,” said the group.
The commercial centre sits on 6.9 acres of land.
Kingston Properties will hold control over the majority of strata.
The company did not disclose the purchase price. But it has over US$13.8 million in cash waiting on deals.
he acquisition comes amid KPREIT’s ongoing investment in Cayman – the Gum Tree 5 which consists of the acquisition of three commercial units in a mixed-use industrial development. That deal is estimated to cost the company US$ 3.13 million and has an expected completion date of December 2023.
“In light of rising interest rates and expectations of an economic recession in many global economies, the group continued its cash retention strategy while maintaining prudent levels of leverage,” said the company in its financial results.
Operating results for the group continue to show improvement during the second quarter of financial year 2023 when compared to the same period in the prior year.
“The expansion of the portfolio in recent years following successive capital raises, along with the high occupancy levels at all our properties, continue to drive this improvement. The stability of our tenant base and the geographic dispersion of our portfolio also support the improved operating performance,” said the company.
For the second quarter of 2023, the group recorded a profit before income tax of approximately US$321,500 compared to US$368,000 in 2022. But for the six-month period, pretax profits improved 6.5 per cent to $1.2 million.
“The growth in profit before income tax in the first half of 2023 was also boosted by higher interest income on the group’s invested cash balances, but was however tempered by higher interest costs,” said the company.
Kingston Properties believes that interest rates are elevated but could rise further, which could “induce” a recession.
Additionally, there is also anticipation that the current high interest rates will create “instability” in the commercial real estate sector given the high levels of leverage extended to that sector over the last four years.
“This scenario could present opportunities for the group to acquire distressed assets, and where feasible, we will use leverage to boost portfolio size further acquiring assets that meet our required risk-return metric,” said the group.
The group has cash at US$8.9 million, with an additional US$4.9 million invested in overseas real estate funds.
[ad_2]
Source link