London-listed Kennedy Wilson Europe Real Estate has emerged as the buyer of a portfolio of loans secured against eight Park Inn hotels across the UK for £61.5 mln (€83 mln). The deal reflects a gross yield on cost of 9.3%.
London-listed Kennedy Wilson Europe Real Estate has emerged as the buyer of a portfolio of loans secured against eight Park Inn hotels across the UK for £61.5 mln (€83 mln). The deal reflects a gross yield on cost of 9.3%.
The non-performing loan package with an unpaid balance of £100 mln was put up for sale last year by lender Natixis and another bank, rumoured to be The Co-Operative Bank.
The hotel properties were acquired by two Danish investor groups in 2006 and 2007 for £131.5 mln. In the largest of the two deals, EjendomsInvest purchased six of the hotels from Jefferson Hotels Limited Liability Partnership in a deal worth £95 mln.
The package includes seven three-star Park Inn hotels in England (Northampton, Lakeside, Telford, Bedford, Harlow, Birmingham West and Nottingham) and one in Wales (Cardiff) totalling 1,107 rooms.
The hotels are leased to Rezidor Hotel Group, a listed hospitality business majority-owned by Carlson, until 2030 with a weighted average unexpired lease term of 15.7 years.
Mary Ricks, president and CEO of Kennedy Wilson Europe, said that the all-cash purchase is 'a classic KWE deal that capitalises on the synergies between its real estate debt and property professionals'.
'This transaction gives us further exposure to the fast improving UK hospitality sector,' she added.
The deal follows KWE's off-market acquisition last week of an office building in Dublin for €45 mln by taking over the non-performing loans on the asset. The deal reflects a net initial yield of 6.7% and marks a discount of around 40% to the €74.8 mln unpaid loan balance on the asset.
The property, Gardner House, is the European headquarters of business networking site LinkedIn. It was previously held as two loans which Kennedy Wilson acquired in November from a financial institution believed to be Deutsche Bank.
Located at Wilton Place in Dublin, the property was sold in 2006 for €82.1 mln before being purchased by Kennedy Wilson in November with an unpaid principal balance of €74.8 mln.
The 75,600 sq ft (7,020 m2) building is let in its entirety to PwC and was its headquarters prior to the accountancy group's move to One Spencer Dock in the centre of Dublin. It is sublet to LinkedIn for the remaining lease term of 3.8 years.
