Kennedy Wilson Europe has entered the UK private rented sector with the £68.5m purchase of a non-performing loan on residential scheme Pioneer Point in Ilford, London.

The debt purchase compares with an unpaid principal balance of £149m. The acquisition is being funded by the company’s cash resources and it plans to take 100% ownership later this year before rebranding and relaunching the development.

KWE’s investment manager, Kennedy Wilson, is an experienced international investor in the private rental housing with more than 20,000 units globally, while KWE has about 440 PRS units in Dublin. However, the Pioneer Point purchase is not the start of a wider foray into the UK PRS market.

Pioneer Point is a mixed-use development comprising 294 units in two tower blocks. Administrators were appointed over the developer in early 2012 and the scheme was completed later that year.

Mary Ricks, chief executive of Kennedy Wilson Europe, said there was significant institutional demand in the UK private rented sector and a lack of available product.

“[Pioneer Point] represents an excellent opportunity to ultimately acquire well located residential accommodation finished to a high specification and with many of the units enjoying uninterrupted views of the City, Canary Wharf and the Olympic Park,” said Ricks.

KWE’s existing £2bn portfolio is mainly invested in office and retail assets in the UK and Ireland.