Kennedy Wilson Europe Real Estate has completed the purchase of a Spanish portfolio of Carrefour and Dia supermarkets for €85.5m (£60.5m) – a yield on cost of 6.9%.
Funded from cash resources, the 11 Carrefours and five Dias cover 593,600 sq ft of lettable space across seven high street shops and nine big-box stores.
Concentrated around Madrid and Barcelona, the assets generate €6m in rent, with 85% of income from Carrefour.
All the leases expire on 31 December 2038 and have six-yearly rolling tenant break options and upward-only rent reviews.
KWE president and chief executive Mary Ricks said: “This exciting acquisition represents KWE’s largest purchase to date in Spain and brings our Spanish ownership to €136.8m, or 3.9% of the total portfolio.
“The prime high street units are 29% under-rented at today’s ERVs. This, coupled with our ability to grow rents through the CPI index-linked leases as the economy recovers and Spanish consumer spending improves and the resetting to market rents through upward-only rent reviews every six years, will deliver another lever to create value.”
Savills advised KWE; CBRE advised AEW Europe.
