Global real estate investment company Kennedy Wilson has acquired Forum, an institutional quality office campus on the south coast of the UK for $81 mln (€72 mln).
Located midway between Southampton and Portsmouth, the asset includes 252,000 ft2 (23,400 m2) of office space across five buildings on a picturesque 30-acre (12 ha) site with lakes, trails, and landscaping.
Mike Pegler, head of UK for Kennedy Wilson, said: 'The acquisition of Forum contributes to our ongoing focus on trading into assets with strong cash flow and high growth potential in the UK.
'We acquired Forum below replacement cost, and the transaction represents a secure initial income stream for Kennedy Wilson with further upside potential as we implement our capital and asset management programs to improve the tenant experience and enhance sustainability credentials onsite.'
The campus is leased to what Kennedy Wilson calls a 'strong line up of corporate tenants', including HSBC and Specsavers, with a weighted average lease term to first break of 4.2 years. The office acquisition was completed at a 6.3% cap rate with 85% occupancy and, following the lease up of the vacant space, the yield on cost is projected to grow to over 9%.
An adjacent 11-acre vacant parcel is also approved for a future mixed-use development including the potential to build light industrial space, which continues to be in very short supply.
Developed between 2001 and 2007, the five buildings are part of the Solent Business Park, a mixed-use project that includes over 1 million ft2 of offices covering over 130 acres. Forum is well located adjacent to Junction 9 of the M27 motorway, with excellent connectivity across the region, and is close to the Whiteley Shopping Centre, which includes restaurants, a hotel and conference facilities, and other amenities.
