EXECUTIVE INSIGHT LEADING THE PROFESSIONAL CHARGE
WINTER 2024
ISSUE 54
CREATING SUSTAINABLE
WEALTH
Jamaica-headquartered Kingston Properties Ltd commemorated 15 years of growth and global expansion
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Creating Sustainable
WEALTH Jamaica-headquartered Kingston Properties Ltd commemorated its 15th anniversary in 2023 – 15 years of growth and global expansion. Pursuing its mission of generating extraordinary returns through the acquisition, development, leasing and management of real estate in a socially and environmentally responsible way, the company is now eyeing new properties further afield, as CEO Kevin Richards revealed in an interview with Jon Bradley.
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ncorporated in Jamaica as a real estate investment company, Kingston Properties Limited (KPREIT), formerly known as Carlton Savannah (REIT) Jamaica Limited, commenced operations with the goal of being the premier real estate investing company that creates wealth for its shareholders.
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“The company was established during the recession in 2008, when investment was tight. Still, we were determined to go, and this has proved to be the right decision. From managing assets worth $4 million at the beginning, our portfolio has growth to reach $70 million in 2023,” says Richards, adding that the target is $100 million by 2025 and progress towards that is in motion. Diversified portfolio Kingston Properties was also the first purely real estate investment company to be listed on the Jamaican stock exchange. Investment outside Jamaica started
soon after establishment – the company bought several condominiums and apartments in Trinidad and Tobago, followed by more in Florida, which catapulted the business forward. Another highly successful investment was also made in the Cayman Islands. With properties owned and managed in several countries, KPREIT is today the premier real estate investment trust in Jamaica. Richards explains that following the principles of a Real Estate Investment Trust (REIT), the company’s shareholders benefit from both the appreciation of the value of the properties owned as well as the distribution of the income derived from those assets. 5
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“The Cayman Islands currently account for 56% of our portfolio, followed by Jamaica with around 40%. The rest is our properties in the US,” says Richards. “Diversification is an important part of our strategy. The view is to offer our investors a diversified pool of real estate assets that are immediately cash-generating – mostly office, warehousing and industrial but also residential. Geographically, we are now looking very closely at the UK market, which offers some great opportunities, to expand our reach further.” Result-driven and efficient When asked what is behind the continuous growth, Richards affirms that efficiency is the key, and the team tries to be judicious in its selection of assets, to ensure that they can be managed optimally.
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“Our annual tenant survey show that we are doing very well and client satisfaction is high, continuously exceeding 80%. We pride ourselves on our responsiveness and being able to have a quick turnaround time whenever there’s an issue. Cooperation with local service and maintenance companies is key for us, and we have partners who have
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been working with us from day one. As a result KPREIT has a consistently high occupancy level, which for most of the year remains at close to 100%.” He further says that the company is now looking at how digital technologies can expand its ability to be more efficient – in terms of communication with clients and investors, service delivery, turnaround times for repair and maintenance works. “Digitisation is something we are planning to invest in this year, as technology is very important to us,” he affirms. “The good thing about our
business is that as we expand our asset base, we don’t necessarily need to add in human bodies to manage the business. Keeping a high level of efficiency is important to improve our margins, but it ultimately also means more dividends in line with our main objective – to create value for our shareholders,” he says. On a growth trajectory Born and raised in Jamaica, with a Masters in Economics from a Canadian university, Richards has both the local knowledge and international experience. “Jamaica has undergone a mas7
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Nunes Scholefield DeLeon & Co. 15 years is a fantastic milestone for any business. While there are no guarantees with any investment, at the core of KPL’s business is real estate. What is real estate? It is land, both above and below the surface and anything fixed or permanently attached to it including buildings, fixtures, improvements, roads and trees. In law we say that land is immovable. It is a fixed asset. But its value changes and can, in the right environment, be maximized, and made to produce income, jobs and generational wealth. KPL has found a formula that allows its shareholders to buy local and own global. Congratulations on successfully hitting the mark again and again! Experience teaches wisdom. Our law firm, a succession of partnerships since 1929, celebrates 95 years this year. We are a full-service law firm of thirty (30) Attorneys-at-Law. The services we offer are broadly covered by three departments, Real Estate/Probate (led by Alexander Cools Lartigue) Litigation (led by M. Maurice Manning, KC), and the Commercial Department (led by Patrick Foster, KC). We know a thing or two about success and riding the storms that come with the journey. It has been our pleasure to share a part of this journey with Kingston Properties Limited. The mutual success of our businesses tells the story: It’s all about the company you keep.
• Arbitration, Mediation and other methods of alternative dispute resolution • Mergers and Acquisitions • Commercial/Corporate Finance • Divorce and other Family Matters • Information Technology • Intelletual Property - Copyright, Patent, Trademark, ect. • Trusts, Wills, Estate Planning and Estates • Taxation • Real Estate Developments • Commercial and Residential Real Estate • Commercial and Civil Litigation • Banking • Employment and Labour Law • Insurance Law - Defence Insurance, etc. • Landlord and Tenant •Maritime Law - Shipping and Admiralty * Pensions • Mortgages • Personal Injury Matters
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sive change over the last fifteen years, with two major inflection points around 2010 and 2013, when the government undertook two major debt refinancing that resulted in a significant reduction in interest rates. That put Jamaica on an incredible growth trajectory, which is continuing, and ultimately also catapulted the real estate market upwards.” With a background in investment, Richards himself joined the company 8 years ago, after a career in portfolio management within a pension fund, covering a range of assets covering stocks, bonds and fixed income assets as well as real estate. “I’ve done various things at different investment houses in Jamaica, before joining Kingston. Working here has been a fulfilling experience. I saw where I could add value to the organisation.” And so he has, given the company’s steep growth. Kingston has incrementally paid higher dividends each year, something that the business prides itself on. Richards points out that over the last 10 years, the Kingston share price has moved from JMD$2.25 to currently trading at around $7.50, tripling in value.
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Sustainable business Still, it is not all just about profits, he claims. “Sustainability is a very important part of our business. Two years ago, we defined a strategy specifically targeted at ESG and sustainability. One of the things we set out to do is to achieve green certification on our properties. We started with a local certification and in 2023 achieved the Gold Standard in the Green Business Jamaica Award, of which we are very proud, as it reflects all our hard work in making sure that our buildings are as sustainable as possible. The next step is international certification.”
Going forward, the company has ambitious plans. “I never like to remain static,” says Richards. “In addition to expanding our property portfolio, we are now looking to establish a real estate private equity business. This will be another form of fundraising, as we don’t want to limit ourselves to only one type of fundraising through the stock market. The objective is to raise money also outside Jamaica, leveraging the Kingston Properties brand based on our success in managing properties. We are hoping to launch our real estate private equity fund in 2024. That is our major goal for the near future.” 9
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