London-listed property investor Kennedy Wilson Europe Real Estate has completed the purchase of 180 mixed-use properties across the UK from multiple receivers acting on behalf of Aviva Commercial Real Estate Finance for £503 mln (€642 mln).

London-listed property investor Kennedy Wilson Europe Real Estate has completed the purchase of 180 mixed-use properties across the UK from multiple receivers acting on behalf of Aviva Commercial Real Estate Finance for £503 mln (€642 mln).

The deal, originally announced in December, is being funded from the company’s cash resources and a new £352.3 mln secured loan facility from Aviva Commercial Real Estate Finance.

The loan, reflecting a LTV on the portfolio of 70%, has been split into three-year floating-rate (33%), five-year fixed-rate (20%) and eight-year fixed-rate (47%) tranches at a weighted average margin of 207 bps and an all-in cost of 296 bps.

The purchase price reflects a net initial yield of 6.9% (gross yield 7.2%).

The 325,000 m2 portfolio is 98% occupied with a weighted average unexpired lease term of 9.6 years (11.1 years to expiry) and generates total net rental income of £36.1 mln. The assets are concentrated in England (54% of the value is weighted towards London and the South East) with the remainder (5% of value) located in Scotland and Wales.

The assets are primarily retail (food and convenience), representing 62% of the value of the portfolio, followed by leisure at 14%, industrial at 12%, and office and hotels at 6%, respectively.

Properties include the Travelodge hotel in King's Cross, London, the Waitrose superstore in Saltash, Cornwall and the Asda superstore in Hemel Hempstead. Major tenants include Wincanton, Debenhams, Travelodge, Waitrose and Matalan.

Mary Ricks, CEO of Kennedy Wilson Europe, commented: 'The completion of this significant acquisition along with attractive and flexible vendor financing materially increases KWE’s stabilised cash flow, reduces the group’s borrowing costs and extends the term to maturity.'

She added: 'We continue to make good progress in deploying the capital raised in October from the secondary offering.'

Including this acquisition, the KWE investment portfolio has grown to £1.95 bn, generating net rental income of £130 mln, and a net initial yield of 6.5% (gross yield 6.7%). Geographically, the portfolio is split between the UK (72%) and Ireland (28%) with an asset mix of 89% direct real estate and 11% loans. The group's weighted average cost of debt is 2.8%.

CBRE advised KWE and JLL acted for Aviva.