By Steven Jackson Business From Jamaica Observer

KINGSTON Properties Limited (KPREIT) wants to acquire up to five overseas properties in the Cayman Islands and USA which would more than triple its annual net operating income to US$2.7 million, financials indicate.

The five properties require an investment of US$34.3 million or higher than the J$954 million that it plans to raise in its rights issue. As such KPREIT plans to partially utilise the funds it raises to consider acquiring a portion of these properties.

The five properties at over 57,500 square feet will add to its existing two properties in the USA and one in Jamaica valued at roughly US$8.2 million.

“To this end KPREIT has selected the below list of properties as potential acquisition opportunities for KPREIT and is seeking to raise from this offer J$953.9 million in order to purchase some of these properties,” stated KPREIT in its circular letter relating to its renounceable rights issue of 136 million shares published this week.”We believe that by purchasing a combination of any of the below properties with the proceeds of the Offer, KPREIT will provide its shareholders access to above average net cash yields in United States dollars as well as geographic diversification outside of Jamaica.”

KPREIT added that if it is unable to close on any of the properties it will pursue other real estate acquisitions. The offer opens on July 22 and ends on July 28 with each new ordinary share selling for J$7.00. KPREIT intends, immediately following the closing of the offer, to make an application to the Jamaica Stock Exchange for the listing of the stock units arising from the new ordinary shares. KPREIT initially listed on the JSE in 2008, as the first real estate investment trust on the exchange.

The five potential properties include Park Place, Grand Cayman, a three-storey building at 25,572 sq. ft which includes 12 condos and retail space; 1790 Coral Way, Miami, USA includes three offices at 20,400 sq ft; 6 Madison Ave, Cresskill, New Jersey, USA which includes 28 residential and eight commercial units; the ‘W’ Fort Lauderdale — five units of a 146 unit condo/hotel at 5,650 sq ft; and Midblock 3250 NE 1st Ave Miami — 7 units at 5,850 sq ft.

Executive director Fayval Williams and chairman Garfield Sinclair believe that KPREIT can earn a 6.3 per cent current cash yield from the potential portfolio of five properties. The potential earnings are similar to its current portfolio which earns a 6.5 per cent current cash yield.