KPREIT Acquires 60,000 Sq Ft Downtown Kingston Portfolio From VM Building Society in Sale-and-Leaseback Deal

Kingston, Jamaica — 25 August 2024

Kingston Properties Limited — the Jamaica Stock Exchange-listed real estate investment company known as KPREIT — acquired two buildings at 6 Duke Street and 8-10 Duke Street in downtown Kingston through a sale-and-leaseback arrangement with Victoria Mutual Building Society. The transaction, totalling nearly 60,000 square feet of commercial space, raises KPREIT’s Jamaican holdings to 43.5 per cent of its total portfolio and demonstrates the company’s belief that downtown Kingston commercial real estate represents “opportunistic” value — in the words of the company’s chief executive — that has not yet been fully priced into the market.

The sale-and-leaseback structure is a well-established real estate transaction format in which a property owner sells its buildings to an investor while simultaneously signing a long-term lease to remain in the buildings as a tenant. For VMBS, the transaction converts a fixed asset into cash while maintaining operational occupancy of the buildings it needs to serve its members. For KPREIT, the deal delivers a fully leased, income-generating commercial asset with a creditworthy institutional tenant on a secured long-term lease — precisely the risk profile that a listed real estate investment company seeks.

The Tenants: KPMG and VMBS

The acquired properties carry strong tenant profiles. 6 Duke Street serves as KPMG’s Kingston office — one of Jamaica’s most established professional services firms. 8-10 Duke Street houses VMBS’s downtown branch, one of the most prominent financial services providers in Jamaica’s community banking and mortgage market. Both tenants are institutional-grade occupiers whose lease obligations are predictable and secure. For a real estate investment company whose returns depend on reliable rental income, these tenant profiles reduce risk substantially compared to smaller, less established occupiers.

KPREIT followed the initial Duke Street acquisition with a second downtown Kingston transaction in November 2024 — the acquisition of a parking lot on East Street used by occupants of the 6-10 Duke Street complex. The parking acquisition reflects a pragmatic approach to value creation: parking is a constrained resource in downtown Kingston, and securing control of the parking that serves its buildings improves the utility and competitive position of the office properties.

Downtown Kingston’s Investment Case

KPREIT’s confidence in downtown Kingston real estate runs counter to the conventional narrative that the city’s commercial centre is underinvested and declining. The company’s chief executive has explicitly described downtown Kingston as “opportunistic” — a market where values are below what the fundamentals support, creating a window for buyers willing to make the commitment before the market reprices. The JIS and Jamaica Observer have both covered the ongoing redevelopment of downtown Kingston’s derelict building stock, with Issa Construction among the developers converting neglected heritage properties into functioning commercial space.

The downtown Kingston investment case rests on several factors. The area contains Jamaica’s highest concentration of government ministries, courts, financial institutions, and heritage buildings. It is served by the main JUTC bus terminal and the primary transport hub for the Kingston Metropolitan Area. And it sits on Kingston Harbour — one of the world’s finest natural harbours — whose waterfront potential has been partly activated by the Kingston Waterfront Redevelopment Company’s US$12-million World Bank-supported programme. As the waterfront matures and government investment in downtown infrastructure continues, the commercial real estate case for downtown Kingston strengthens.

“KPREIT’s downtown Kingston acquisitions are a signal that serious institutional money sees value there,” said Dean Jones, Managing Director of Jamaica Homes. “A sale-and-leaseback with VM Building Society and KPMG as tenants is not a speculative bet — it is a disciplined, income-oriented acquisition of high-quality assets at what the buyer believes is an attractive price. If KPREIT is right, and I believe they are, then downtown Kingston is early in a re-rating cycle that will bring values closer to what the location and the tenant quality actually support.”

KPREIT’s UK Portfolio and International Strategy

KPREIT’s December 2024 announcement of an $800-million UK acquisition — adding to its existing United Kingdom portfolio — demonstrated that the company is not limiting its investment universe to Jamaica. The international diversification serves both a risk management purpose and a return optimisation purpose: the UK market offers different risk-return characteristics from the Jamaican market, and the combination of local and international exposure positions KPREIT as a more diversified real estate investment vehicle than a purely Jamaican portfolio would allow. The company’s deepening of its UK presence in early 2026 confirmed the international strategy as an ongoing priority alongside the Jamaican acquisitions.