Kennedy Wilson invests £211m in UK office portfolio

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Kennedy Wilson Europe Real Estate has spent £211m (€298m) on a portfolio of office assets near London.

The London-listed firm said it has bought nine offices in the south east of the UK from Apollo Global Management at a 8% yield.

The 814,700sqft portfolio generates £17m in rental income.

Tenants include telecommunications firm BT, publishing group Pearson and the UK government.

Kennedy Wilson said 80% of the portfolio’s income comes from “very strong covenants”. The portfolio is 98.6% let.

Mary Ricks, chief executive of Kennedy Wilson Europe, said: “This is a high quality portfolio, which we have acquired at an attractive entry basis with it trading at substantial discounts to both historic 15-year average and market peak capital values, yields and rental values.

“The portfolio provides a good balance between security of income – with strong tenant covenants and high occupancy – along with sufficient medium term lease events to capture today’s ERVs, which are 5% ahead of passing rent, and future market rental growth.”

Kennedy Wilson Europe holds £2bn of office and retail assets in the UK and Ireland.

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