KWE acquires south east office portfolio for €298 mln (UK)
Kennedy Wilson Europe Real Estate Plc an LSE listed property company that invests in direct real estate and real estate loans in Europe, has completed the acquisition of nine south east offices from an entity affiliated with Apollo Global Management LLC. The underlying real estate is valued at £211 mln (approx. €298 mln) at completion, reflecting a yield on cost of 8.0%. The corporate acquisition was funded from the company’s cash resources.
The nine modern offices comprise 814,700 ft² (approx. 75,700 m²) of lettable space, generating a day one NOI of £17 mln (approx. €24 mln) from 14 tenants, with 80% of the income coming from very strong covenants, including listed companies and the government. The weighted average unexpired lease term is 5 years (5.4 to expiry) and occupancy by ERV is 98.6%.
Significant asset management opportunities include re-gears, extending lease lengths, refurbishments, rental growth from rent reviews, and improving voids with 52% of the current NOI subject to lease events over the next 24 months.