Kennedy Wilson Fund spends £0.5bn on UK mixed-use portfolio

London-listed property company Kennedy Wilson Europe Real Estate (KWE) has spent over half a billion pounds on buying a portfolio of 180 mixed-use properties across the UK.

KWE said on Monday that it has acquired the 3.5m square-feet portfolio from multiple receivers on behalf of Aviva Commercial Real Estate Finance for a purchase price of £503m, reflecting a net initial yield of 6.9%.

The deal will be part-funded by existing case resources as well as a new £352.3m secured loan facility with Aviva.

The assets, which are predominantly located in England with 54% in London, are currently 98% occupied and generates net rental income of £36.1m.

Retail, food and convenience accounts for 62% of the value of the portfolio, followed by leisure (14%), industrial (12%), office (6%) and hotels (6%).

"This significant portfolio acquisition allows us to access a high quality mixed use portfolio with strong tenant covenants generating robust income streams at a material discount to the original loan amounts,” said KWE’s president and chief executive Mary Ricks.

“The portfolio benefits from a number of institutional quality investments with good individual asset liquidity across the remaining portfolio. There are significant asset management angles, including growing income through lease re-gears, renewals, rent reviews and the leasing up of vacant space.”

The stock was up 0.9% at 1,047p by 08:09 on Monday morning.