1,110.00p

Share price at 15:02

Interim Results for the period ended 30 June 2014

7 August 2014

Kennedy Wilson Europe Real Estate builds over £18 billion portfolio in four months since IPO.

Kennedy Wilson Europe Real Estate Plc, a LSE listed company that invests primarily in real estate and real estate loans in Europe (LSE: KWE), today announces its results for the period from incorporation on 23 December 2013 to 30 June 2014. Highlights for the period ended 30 June 2014 include the completion of a £1 billion flotation on the Main Market of the London Stock Exchange on 28 February 2014 at £10 per share and subsequently included in the FTSE 250.

HIGHLIGHTS FOR THE PERIOD ENDED 30 JUNE 2014:

Overview:

  • Successfully completed a £1 billion flotation on the Main Market of the London Stock Exchange on 28 February 2014 at £10 per share and subsequently included in the FTSE 250 stock index
  • Second largest London Stock Exchange real estate IPO on record
  • Eight acquisitions completed in four months since the IPO
  • £1.05 billion portfolio market value
  • Interim dividend declared of 2 pence per share
  • A well-established European management and advisory team, with over 60 real estate professionals and growing

Financial:

  • NAV of £992.5 million, with a NAV per share of 991.4p
  • Profit before tax of £24.7 million
  • Earnings per share of 37.6p
  • Non-recourse floating rate debt of £202.9 million
  • Loan to value of 17.3%

Portfolio:

  • Effectively deployed over £1 billion of the IPO proceeds in eight acquisitions, comprising 74 direct real estate assets and two loan portfolios secured by 25 properties, across the UK and Ireland
  • Combined total portfolio gross income of £75.4 million and gross yield of 7.6%1
  • By value, 62% of the portfolio is in the UK, with the remaining 38% in Ireland
  • By investment type, around 90% of the portfolio is in direct real estate, with the remaining 10% in loans
  • By asset class (direct real estate only), 59% of the portfolio is in office, 22% in retail, 10% in industrial and 9% in multifamily
  • Real estate portfolio:
    • generating £67.5 million of gross rental income per annum
    • delivering a 7.7% gross yield1
    • 89% occupancy2
    • 5.9 million sq ft
    • WAULT of 8.1 years
  • Loan portfolio:
    • two loan portfolios with £135 million unpaid principal balance
    • generating £7.9 million of gross income per annum
    • 84% of loan portfolio value secured by long-term UK Government leases
    • secured by 25 real estate assets in total
  • Adopted a unique, in-house approach to strategic asset management across some of the major assets, which have been value enhancing for the portfolio including:
    • successfully leased vacant space
    • re-geared leases
    • selective refurbishment projects
    • sought planning permission to add square footage

Since 30 June:

  • A further three acquisitions undertaken in Ireland for an aggregate consideration of £118.4 million – comprising two direct real estate assets and one loan portfolio secured by 13 properties
  • Completed a £127 million debt financing secured against the Tiger and Artemis portfolios
  • Loan to value (at the date of this announcement) of 25%

Outlook:

  • Made excellent progress since the IPO in delivering on the Company’s strategy of building a large-scale, high quality and diverse portfolio of real estate and real estate loans
  • Steady recovery in our target markets with a number of financial institutions currently looking to accelerate their de-leveraging programs 
  • Identified a robust pipeline of assets in target jurisdictions in Europe, which are at different stages of evaluation, and is actively exploring these opportunities
  • Well positioned to capitalise on the market opportunities and extract value from the existing portfolio, to deliver shareholder value

Investment Management Fee - Share Issuance:

For the period ended 30 June 2014, based on an EPRA NAV of £992.9 million, a quarterly management fee of £2.5 million will be paid to KW Investment Management Ltd, as investment manager to the Group. In line with the Investment Management Agreement, this fee will be paid 50% in shares (116,208 shares) and 50% in cash.

Dividends:

The directors of the Company have resolved to pay an interim dividend of 2.0 pence per share. See below the dividend payment timetable:

Dividend declared: 7 August 2014
Ex-dividend date: 13 August 2014
Record date: 15 August 2014
Payment date: 29 August 2014  

Commenting, Charlotte Valeur, Chairperson of Kennedy Wilson Europe Real Estate, said: “The Board is very pleased with the Company’s progress and performance since its IPO. The Board believes that the Company is on a sound operational and financial footing to progress its investment strategy and is well placed to enhance rental and capital growth through active asset management initiatives. The Board further believes that the overall European market is characterised by improving market sentiment and the Company is well positioned to capitalise on the opportunities this presents and grow the portfolio in line with its strategic investment objectives as it seeks to deliver shareholder value.”

Mary Ricks, President and CEO of Kennedy Wilson Europe, commented: “We have made excellent progress towards achieving the strategic goals we set out at the time of the IPO. In the short space of four months, we have built a high quality income producing investment portfolio and we believe there is visible upside to come through our asset management programs. We continue to be highly active in our target markets and are looking at a strong pipeline of assets in the short to medium term. We’ve had a very positive first half of the year on both financial and operational fronts, and are optimistic about the prospects for delivering value to our shareholders as we build our current portfolio and source further opportunities that are aligned with the Company’s objectives.”

Notes: 1. Excluding development site 2. Total occupancy calculated on total area

Leavesden Park, Watford, UK (1)

Investor enquiries
Juliana Weiss Dalton, CFA
Investor Relations Director,
Kennedy Wilson Europe
+44 (0) 20 7479 7429
ir@kennedywilson.eu

Press & media enquiries 
Dido Laurimore / Tom Gough
FTI Consulting
+44 (0) 20 3727 1000
kennedywilson@fticonsulting.com