FINANCE: Kennedy Wilson is to buy the Fordgate Jupiter portfolio previously owned by Moises and Mendi Gertner’s private property company for £296m.
Kennedy Wilson Europe Real Estate has entered an agreement to acquire the 21-strong mixed-use portfolio through a CMBS loan enforcement process after buying a tranche of subordinated debt as revealed by Estates Gazette.
The US investor’s London listed vehicle will purchase the English assets from Dudley Holme-Turner of Cushman & Wakefield and Simon Thomas from Moorfields Corporate Recovery as fixed charged receivers.
It has also agreed to buy the Scottish properties from Mount Street as borrower security trustee and as mortgagee in possession.
KWERE already owns certain subordinated loans – tranches 1, 2 and 3 of the B loan notes – secured by the Fordgate Jupiter Portfolio which it acquired at a discount in April 2014.
The UK portfolio includes nine offices, two mixed, five car showrooms, three leisure, one retail and one warehouse, where the top seven assets represent 84% of the total value of the portfolio.
It currently delivers gross rental income of £25m per annum, of which 47% is from Scotland and 74% is from the office element.
The assets are 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% of the gross rental income.
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%, “providing numerous opportunities for income enhancement through letting up vacant space”.
Mary Ricks, president and chief executive of Kennedy Wilson Europe, said: “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.”
Bridget.O’Connell@estatesgazette.com
