Kennedy Wilson Europe Real Estate has completed the acquisition of nine office properties in the UK’s south east region from an affiliate of Apollo Global Management for £211 mln (€297 mln).
Kennedy Wilson Europe Real Estate has completed the acquisition of nine office properties in the UK’s south east region from an affiliate of Apollo Global Management for £211 mln (€297 mln).
The purchase price reflects a yield of 8% and was funded from the company’s cash resources.
The nine offices are located in Watford, Farnborough, Harlow, Hook, Maidenhead, Heathrow, Slough, Bracknell and Reading and comprise a total 814,700 sq ft (around 75,000 m2) of lettable space. The assets generate a net operating income (NOI) of £17 mln from 14 tenants, which include listed companies and government entities.
The weighted average unexpired lease term (WAULT) is 5.0 years (5.4 to expiry) and the buildings have an occupancy rate of 98.6%.
London-listed KWE said in a statement that the properties provide significant asset management opportunities, including extending lease lengths, refurbishments, rental growth from rent reviews and improving void rates.
Mary Ricks, CEO of Kennedy Wilson Europe, commented: ‘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.
'Furthermore, 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 5.0% ahead of passing rent, and future market rental growth.’
