Kennedy Wilson buys €75m Irish loan portfolio

Kennedy Wilson Europe Real Estate has agreed a deal to buy a portfolio of loans secured against Irish real estate for €75m.

The loans are being sold by Royal Bank of Scotland’s Irish subsidiary Ulster Bank. Known as the Elliott Portfolio it includes loans held against 13 assets. The three largest, which make up around 90% of the portfolio by acquisition value are:

–          The Times Building, a 67,000 sq ft office building in Dublin city centre which is let to the Irish Aviation Authority for 12 years.

–          Herberton, a multi-family housing asset in Dublin 8 near St James’s Hospital, comprising over 150 apartments located across three blocks, which are fully let.

–          Lakeland Retail Park, an 83,052 sq ft bulky goods retail park on the outskirts of Cavan Town, comprising six retail units and a drive through restaurant. The retail park is currently around 91% let and has an average unexpired lease term of 12 years.

The company said that the portfolio has “significant asset management opportunities to lease up vacant space, stabilise income through tenant re-gears, and re-position assets to maximize income”. The acquisition is expected to complete in early September 2014.

Additionally the company has bought the Marshes Shopping Centre in Dundalk for €44.5m. It was part of RBS’s Project Swallowtail sale earlier this month, which saw assets owned by John McGuckian and Ken Cheevers’ Abbey Group and Foyleside Group sold off. The centre has 38 retail units, is 93% let and has an average unexpired lease term of 6.8 years. The acquisition is expected to complete at the end of August 2014.

Mary Ricks, president and chief executive of Kennedy Wilson Europe, said:

“The Elliott loan portfolio is secured against a good quality mix of Irish properties strongly weighted towards the office, residential and retail sectors. These assets, along with the Marshes Shopping Centre, also provide for strong upside potential through interesting asset management plays and a relatively long weighted average unexpired lease term.”