Kennedy Wilson Europe has bought its first assets in Italy, investing €185.5m ($205m) in an office portfolio.

The portfolio will be managed by Savills Investment Management SGR and held in a closed-end real estate vehicle, the Olimpia Investment Fund.

Kennedy Wilson said it would take full ownership of the fund in late December.

InvestiRE, an Italian fund manager, or SGR (Società di Gestione del Risparmio), sold the offices.

The assets – in Florence, Milan and Rome – had been held in a closed-end fund, Fondo Immobili Pubblici (FIP).

The 1.1m sq ft portfolio, fully let to the Italian government, was sold at a 6.3% yield.

Mary Ricks, president and chief executive at Kennedy Wilson Europe, said the company had kept a “close eye” on the Italian market since its IPO.

“This is an exceptional portfolio backed by strong covenants to the Italian government with long, unexpired lease terms relative to local leases,” she said.

“The portfolio includes institutional-quality assets with significant reversionary potential, redevelopment angles and good liquidity of smaller assets with good income returns and a sticky government tenant.”

The portfolio, Ricks said, includes a major redevelopment in Milan’s Via Valtellina, as well as two institutional properties in Rome and Florence.