Kennedy Wilson buys 180 properties for £503m

Kennedy Wilson Europe is spending £503m to acquire a portfolio of 180 mixed use properties all of which are in receivership and all of which were financed by Aviva Commercial Real Estate Finance. the money is coming in part from KWE’s cash resources and part from a £352.3m secured facility provided by Aviva Commercial Real Estate Finance. At the acquisition price the net initial yield on the portfolio is 6.9%.

In aggregate the portfolio comprises 3.5m sq ft of space, 98% let with a weighted average unexpired lease term of 9.6 years and rental income of £36.1m. It is mostly located in England 54% weighted towards London and the South East with 5% of value weighted towards Scotland and Wales. The primary sector use is retail, food and convenience, comprising 62% of the value of the portfolio followed by leisure at 14%, industrial at 12%, and office and hotels at 6%, respectively. Properties include the likes of the Travelodge hotel in King’s Cross, London, the Waitrose Superstore in Saltash, Cornwall and the Asda Superstore in Hemel Hempstead. The top ten tenants represent 32% of total net rental income with a WAULT of 12.6 years (14.9 years to expiry). These include Wincanton, Debenhams, Travelodge, Waitrose and Matalan.

Following this deal, Kennedy Wilson Europe’s portfolio will have a value of £1.95bn with net rental income of £130m, generating a net initial yield of 6.5% (gross yield 6.7%). The portfolio geographic split will be 72% UK and 28% Ireland with an asset mix of 89% direct real estate and 11% loans. The main sector splits will be 40% office, 27% retail and 8% industrial.

KWE : Kennedy Wilson buys 180 properties for £503m

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