Kennedy Wilson has bought a portfolio of Spanish supermarkets from AEW Europe.
The firm’s listed Europe Real Estate arm paid €85.5m for the portfolio of 16 supermarkets, reflecting a 6.9% yield. The deal is its largest in Spain.
The portfolio, sold by a joint venture between French institutional investors managed by AEW, includes 11 Carrefour supermarkets and five Dia supermarkets.
Most of the 593,600 sqft portfolio is in Barcelona and Madrid.
The stores are fully-let to Carrefour and Dia on triple net leases.
Mary Ricks, president and CEO of Kennedy Wilson Europe, said: “The portfolio benefits from a strong geographic concentration around the affluent areas of Madrid and Barcelona regions, where around 70% of the income is generated along with the robust tenant covenants of Carrefour and Dia providing secure income streams.”
Ricks said the portfolio carried a 570bps premium to the respective 1.2% and 1.1% corporate bond yields of Carrefour and Dia.
The firm said the portfolio’s net operating income of €6m is split, with 85% from Carrefour and 15% from Dia. All leases expire at the end of 2038, with the next break option at 31 December 2020.