KKR is investing €528m to acquire a 49% stake in a new joint venture seeded with a portfolio of European net-lease assets contributed by Realty Income.
NYSE-listed Realty Income will retain a 51% majority interest in the 54-property portfolio, which spans Spain, Ireland, Poland and the Netherlands, and will continue to manage the assets through its European operating platform.
The seed portfolio spans essential and retail sectors, with its top five client categories comprising grocery, transportation services, home improvement, home furnishings and automotive parts.
Sumit Roy, Realty Income’s president and CEO, said: “This transaction marks another important step in Realty Income’s evolution as the leading global net-lease platform. Building on the private capital foundation we have established in the US, our strategic partnership with KKR extends this strategy into Europe and demonstrates both the portability of our competitive advantages across borders and the confidence that leading institutional investors have in our platform.
“We believe the long-term cost and structure of this equity financing create meaningful upside for our shareholders, while further diversifying our capital sources beyond the public markets.”
Christopher Sheldon, KKR partner, said: “We are proud to support Realty Income as it extends its private capital strategy into Europe through this bespoke capital solution, designed with the flexibility to expand in line with the company’s evolving needs.
“This transaction builds on KKR’s 50-year history of combining partnership with scaled, long-term capital to help leading companies around the world create lasting value.”
Seb d’Avanzo, co-head of European real estate equity at KKR, said: “We are pleased to invest alongside Realty Income, one of the world’s largest net-lease REITs, in a diversified portfolio of high-quality, hard-to-replace assets across key markets in Europe, supported by strong underlying real estate fundamentals. We look forward to working together as Realty Income continues to grow its presence in the region.”
To read the latest IPE Real Assets magazine click here.
