Kennedy Wilson Europe (KWE) has acquired office buildings in Dublin and a Manchester business park for a total of €181 mln.
The London-listed company announced that it had completed the acquisitions of two suburban office assets in Sandyford and Blackrock in South Dublin for a total of €76.9 mln.
KWE completed the acquisition of the Chase, Sandyford, Dublin 18 for €62.5 mln from Chase Arkle. The purchase price reflects a yield on cost of 4%, with the building only 68% occupied. The Chase was completed in 2009. It occupies 175,600 sq ft (16,314 m2) of space, has 242 car parking spaces and is within 20 minutes of the city centre via the nearby Luas (tram) system. It is five minutes' drive to the M50 (Dublin’s main orbital road).
KWE also completed the acquisition of three office buildings at Blackrock Business Park, Co. Dublin in March 2016, for €14.4 mln from Hudson Advisors which took control of the properties in 2014 via a loan acquisition. The purchase price reflects a yield on cost of 6.8%. The properties, completed in 2007, comprise 50,500 sq ft of space and 85 car parking spaces.
Located close to Blackrock Dart station, the properties are multi-let, with occupancy at 98.5% and with a WAULT (weighted average unexpired lease term) of 5.2 years (8.3 years to expiry).
Including the above acquisitions, KWE’s Dublin suburban office portfolio comprises four assets totalling €90 mln across 279,700 sq ft. The portfolio is 75% let with a WAULT of 3.8 years (9.5 years to expiry).
Peter Collins, chief operations officer and head of Ireland for Kennedy Wilson Europe, commented: 'We continue to be attracted to the fundamentals of the South Dublin suburban office market and the Chase represents one of the leading offices in this catchment. Following significant improvement in city centre office rents and capital values over the last two years we believe that top quality suburban offices are poised for a catch up. In addition, both the Chase and Blackrock provide us with attractive asset management opportunities to add to and reconfigure space, lease up voids, benefit from rent reviews and re-gear leases to grow values.
'Our Dublin suburban office portfolio is 24% under-rented and with 48% of the income with a lease event over the next two years, we expect to capitalise on this gap as well as benefit from future rental growth in this market and move closer to our target stabilised yield of about 7% across this portfolio.
Manchester
Separately, KWE said that it had completed the acquisition of Towers Business Park, South Manchester from Lone Star, for £82 mln (€104 mln), reflecting a topped-up yield on cost of 6.7%.
Towers Business Park comprises 10 suburban offices totalling 289,100 sq ft (26,860 m2) located in South Manchester. The offices are let to 21 corporate occupiers, including John Lewis, British Airways, Honeywell, Oracle, Syngenta and Cisco.
The portfolio is 96% let and the majority of leases benefit from five-yearly upward-only rent reviews and a WAULT of 5.0 years (6.5 years to expiry).
Mary Ricks, President and CEO of Kennedy Wilson Europe, commented: 'The acquisition of Towers complements our existing suburban office portfolio acquired in the South East of England in July 2015. The portfolio provides best in class location, quality and blue-chip tenant roster with significant value-enhancing asset management angles.'
Both the Dublin and Manchester deals were funded by the company's existing resources.
