By Anthony Morgan

THE ANALYSTS are confident that Kingston Properties (KPREIT) will raise fresh capital on the market through an Additional Public Offer (APO).

KPREIT announced on November 3 that it intends to double the number of the company’s ordinary shares before it goes back to the market. Shareholders are expected to approve the APO of new ordinary shares and a change the company’s articles to allow for electronic meetings at the next extraordinary general meeting.

Business Writer at the Jamaica Observer, David Rose, said KPREIT will possibly return to the equities market to raise those funds next year, to help raise its market cap to $10 billion (about US$68 million). 

The company had set a three year window to raise that figure and shaved $2 billion (about US$14 million) off the target through a rights issue in December 2019.

“Instead of another rights issue they’re doing an APO,” said Rose, reasoning that KPREIT’s operations are being repositioned for an upcoming shift in the real estate market. An APO would allow outside investors to participate in the offer, unlike a rights issue which only offers new shares to existing shareholders. 

KPREIT’s net profit grew “tenfold” to US$414,000 for the third quarter ended September 30, 2020 compared to US$41,000 a year earlier.

Rose said these figures were significantly influenced by their recent acquisitions. This year, the company purchased an 88,000 square foot warehouse on four acres of land in Kingston’s industrial belt on East Ashenheim Road, and also Harbour Centre, a multi-story office building in the Cayman Islands.

Rose added that KPREIT remains committed to seeking out good deals in the current environment, and had even disposed of properties in Miami to shore up its finances.

Meanwhile, Investment  Analyst at PROVEN Wealth, Julian Morrison said KPREIT has taken an asset management approach to their business. He said the company has been detailed and transparent in their reporting strategy. He reasoned that the company has set itself on a good path for growth with current financials outperforming figures over the last three years.  

“I have confidence in KPREIT based on the expertise and the level of experience they have being at least 10 years in the game as a listed company,” he said. 

Equity Trader at JMMB, Clive Charlton said while the market has not been hasty in its response to KEPREIT, he thinks the APO “can and will do well”.

He argued that the offer will attract a lot of retail investors as well as fund managers, high net worth and institutional investors who are usually interested in these types of products. 

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Watch the full discussion here: