Kennedy Wilson Europe Real Estate has sold a portfolio of UK real estate loans for £100m (€129.3m).

The London-listed property company said it sold the underlying collateral of the Avon loan portfolio to a UK infrastructure fund at a 6.5% yield.

Mary Ricks, president and chief executive, said the sale was part of the company’s £300m non-core disposal programme.

The regional portfolio is backed by five fire control centres totalling 114,900 sqft and leased to the UK government.

The leases are reviewed on a five-year basis, with fixed annual indexation of 2.5% and a 15.1-year unexpired lease term.

Ricks said the company had increased the portfolio’s value by improving income through asset management.

“We resolved the loan by selling the underlying real estate where the leases are materially over-rented,” she said, adding that the company anticipated “limited future growth prospects.”

The Avon portfolio delivered a 15.3% return on cost and 10% unleveraged IRR.

The company paid £93.5m for the portfolio in 2014.