Kennedy Wilson Europe Real Estate is to acquire a mixed use portfolio through a CMBS loan enforcement for a total cash consideration of GBP296 million.
The portfolio is being acquired from Dudley Holme-Turner of Cushman & Wakefield and Simon Thomas from Moorfields Corporate Recovery as fixed charged receivers (in respect of the English properties) and Mount Street as borrower security trustee and as mortgagee in possession (in respect of the Scottish properties).
The company already owns certain subordinated loans (tranches one, two and three of the B loan notes) secured by the Fordgate Jupiter Portfolio which it acquired at a discount in April 2014.
The mixed use Fordgate Jupiter Portfolio comprises 21 assets located across the UK, including nine offices, two mixed, five car showrooms, three leisure, one retail and one warehouse, where the top seven assets represent 84 per cent of the total value of the portfolio. The portfolio currently delivers gross rental income of GBP25 million per annum, of which 47 per cent is from Scotland and 74 per cent is from the office element.
The portfolio is let to a number of blue chip companies including HSBC, Chevron UK, Conoco and the Secretary of State for the Environment, with the top six tenants accounting for over 50 per cent of the gross rental income from the portfolio.
The portfolio is currently let on 167 leases, with a weighted average unexpired lease term of six years to break, and has a vacancy rate of approximately 10 per cent.
Mary Ricks, president and CEO of Kennedy Wilson Europe, says: “This transaction illustrates our unique ability to invest across asset class, capital structure and different instruments to access and control quality real estate assets. The highly visible and secure income, complemented by strong underlying tenancies, together with a number of asset management plays, including leasing efforts, which we have already identified in the portfolio, make this an extremely attractive investment for us.”