UK Retail Portfolio Brings $758M

LONDON—Kennedy Wilson says that its Kennedy Wilson Europe Real Estate Plc, has acquired a mixed use property portfolio of 180 properties located in the United Kingdom from Aviva Commercial Real Estate Finance, in a transaction totaling approximately $758 million (£503M). Aviva is a subsidiary of Aviva Plc, the UK's largest insurer. Kennedy Wilson (KWE) has closed the acquisition of 163 of the 180 properties, with a value of approximately $669 million (£444M).The remaining 17 properties in the portfolio are expected to close subject to certain conditions. “The completion of this acquisition along with attractive and flexible vendor financing materially increases KWE's stabilized cash flow,” said Mary Ricks, president and CEO of Kennedy Wilson Europe. “KWE continues to make good progress in deploying the capital raised in October 2014 from the follow-on offering.”

The acquisition is being funded from KWE's cash resources and a new $530 million (£352M) secured loan facility with Aviva. The portfolio consists of approximately 3.5 million square feet of space, is currently 98% occupied and is expected to generate approximately $54 million (£36M) of net rental income. The portfolio is predominantly located in England, with 54%, by value, weighted towards London and the South East and 5% weighted towards Scotland and Wales. The primary sector use, by value, is retail, food and convenience, comprising 62% of the portfolio, with leisure, industrial, office and hotels making up the balance.

Real estate related acquisitions by KWE since its inception in February 2014, which total more than $2.9 billion (£1.9B), currently generate approximately $196 million (£130M) million of net rental income and consist of more than 10 million square feet. Kennedy Wilson currently owns approximately 14.9% of the total issued share capital of KWE and serves as its external manager.