Kingston Properties has announced November 8 as the date for its $2 billion renounceable Rights Issue.
The real estate investment trust company is seeking to raise approximately $2 billion by offering to its existing ordinary shareholders the opportunity to participate in the rights issue at a rate of 1.106 new shares for every ordinary share already held at a subscription price of $5.62 per new share.
The rights issue is in respect of an additional 355.87 million new ordinary shares in the company, which was approved by shareholders at their annual general meeting last August.
Kingston Properties last executed a rights issue in 2015, which raised $650 million at $7 per share. Then in 2017, Kingston Properties executed a two-for-one stock split.
Kingston Properties plans to use the proceeds of this latest rights issue to purchase commercial real estate property in Jamaica and the Cayman Islands.
The company earlier indicated that the new acquisitions will focus on commercial real estate, including an undisclosed number of offices, warehouse and industrial spaces. While looking to seek out these new real estate acquisitions, Kingston Properties is also disposing of about five condominiums in Florida, currently up for sale.
REDUCING EXPOSURE IN THE US
This is being done deliberately to reduce its exposure to US residential properties. The real estate company once owned 27 apartments in Florida, but reduced that number to 18. That market suffered from an oversupply of luxury condos.
Kingston Properties currently holds $2.58 billion of investment properties, with its most recent acquisition being the former Caldon Finance building in New Kingston.
“Every year we raise funds to buy properties, so these acquisitions are part of our business model,” said Kingston Properties CEO Kevin Richards. “In the past, we accumulated bank financing and this time we are deciding to raise funds by way of equity in a rights issue,” he noted.