1,103.00p

Share price at 20:31

2014 Results

26 February 2015

COMPANY COMPLETES £1.5 BILLION OF ACQUISITIONS IN FIRST TEN MONTHS QUARTERLY DIVIDEND INCREASES BY 75% TO 7P PER SHARE. Kennedy Wilson Europe Real Estate Plc (LSE: KWE), an LSE listed property company that invests in direct real estate and real estate loans in Europe, today announces its first set of results from incorporation on 23 December 2013 to the period ended 31 December 2014 (the “Period”).

Financial Summary:    
    Inception to
31 Dec 2014
     
Net operating income ("NOI") (£m)   46.9
Net profit after taxation (£m)   78.5
EPRA earnings (£m)   23.1
EPRA earnings per share (p)   25.9
Basic earnings per share (p)   88.0
Dividends per share for the year - 2 quarters (p)1   6.0
Quarterly dividend per share to be paid on 20 Mar 2015 (p)   7.0
     
    As at 31 Dec 2014
EPRA NAV (£m)   1,382.4
Basic NAV   1,389.9
EPRA NAV per share (p)   1,021.8
Basic NAV per share (p)   1,027.4
Portfolio value (£m)2   1,489.0
Net debt   104.0
Loan to value ("LTV") (%)3   7.0
     

Strong Operational highlights in the Period:

  • £1,314.9 million4 of net equity proceeds raised at IPO and secondary offering
  • £1,478.3 million of total acquisitions completed in the Period across 82 properties and five loan portfolios, reflecting a yield on cost5 of 6.6%
  • Property portfolio generates annualised NOI of £90.6 million with occupancy6of 90.9%with WAULT7 of 7.7 years (8.9 years to expiry)
  • Strong progress on asset management business plans; 128 leasing transactions undertaken over 532,400 sq ft adding a further £4.5 million to NOI; new lettings accounted for 272,200 sq ft on average lease lengths of 9.1 years (10.0 years to expiry)
  • Portfolio value of £1,489.0 million, reflecting a surplus of £57.9 million

Financial highlights in the Period:

  • EPRA NAV of £1,382.4 million or 1,021.8 pence per share, an increase of 5.6% over the NAV at IPO in February 2014 of 968.0 pence per share
  • A total of 6.0 pence per share, or £7.4 million of dividends was paid during the Period and today we announce an interim quarterly dividend increase of 75% to 7.0 pence per share or 28.0 pence per share annualised

Post Period end achievements:

  • Over £560 million in acquisitions, including the £503.0 million8 Aviva/Gatsby portfolio of 180 properties across the UK, a portfolio of eight Park Inn non-performing loans (“NPLs”) and the cashless transfer of the Gardner House NPL, in central Dublin, to direct real estate
  • £352.3 million of new vendor financing9 at an average cost of 2.96% for the Aviva/Gatsby portfolio
  • Adding £42.0 million of associated annualised NOI taking the total NOI to £133.4 million
  • In Dublin, commenced construction of Block K at Central Park to build 166 new residential units and complete tenant amenities at adjoining Vantage building
  • Portfolio occupancy10 is up by 3.6% to 94.5% and WAULT11 is at 8.2 years

Charlotte Valeur, Chair of Kennedy Wilson Europe Real Estate Plc, commented:  "2014 has been a year of notable milestones. KWE’s successful IPO was the second largest real estate IPO in LSE history. The team has delivered on all fronts and the robust financial and operating performance underpins today’s interim quarterly dividend announcement of 7 pence, a 75% increase.”

Mary Ricks, President and CEO of Kennedy Wilson Europe, added:  “We are pleased with our progress since the IPO and have put in place the stepping stones to deliver both income growth and long term capital appreciation. The team’s ability to execute on £1.5 billion of investments in ten months highlights our sourcing capabilities and deep local relationships across the industry and with financial institutions.

“We believe the current European environment will lead to a prolonged period of low interest rates and profitable opportunities in our target markets where active asset management will generate attractive total returns. Our pan-European remit across multiple sectors means that we can leverage our platform across property cycles in different geographies as the path to recovery remains uneven across Europe.”

 

Notes:

  1. Portfolio value based on valuation by external valuers, CBRE (for direct property portfolios) and Duff & Phelps (for loan portfolios), as at 31 December 2014
  2. LTV calculated as net debt over portfolio value (value of investment and development properties + loans secured by real estate + hotels). No drawdown has been made under the revolving credit facility
  3. Includes shares issued to the Investment Manager for part settlement of the quarterly Investment Management fee
  4. At the time of acquisition using actual purchaser’s costs
  5. Occupancy excluding hotels, weighted by estimated rental values (ERVs), occupancy by area is 89.6%
  6. Weighted average unexpired lease term (“WAULT”) is to first break, weighted by net rental income; excluding hotels and residential; WAULT to expiry is 8.9 years
  7. Completion of 163 properties with a value of £443.6 million and delayed conditional completion of 17 properties with a value of £59.4 million
  8. £309.9 million based on completion of 163 properties with £42.4 million to be drawn on completion of the remaining 17 properties
  9. Occupancy excluding hotels, weighted by estimated rental
  10. Quarterly dividend payment of 2p per share on 29-Aug-14 and 4p per share on 28-Nov-14
  11. values (ERVs), occupancy by area is 94.8%
  12. Weighted average unexpired lease term (“WAULT”) is to first break, weighted by net rental income; excluding hotels and residential; WAULT to expiry is 9.5 years

Cautionary Statement and Forward Looking Statements

This announcement has been prepared for, and only for the members of the Company, as a body, and no other persons. The Company, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. By their nature, the statements concerning the risks and uncertainties facing the Company and/ or the Group in this announcement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. This announcement may contain certain forward-looking statements with respect to Kennedy Wilson Europe Real Estate Plc (the “Company”) and its subsidiaries (together, the “Group”), and the Group’s financial condition, results of operations, business, future plans and strategies, anticipated events or trends, and similar matters, that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results of operations, performance or achievements of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements speak only as at the date of this announcement. The Company undertakes no obligation to release publicly any revisions or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or any appropriate regulatory authority. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. Nothing in this announcement should be construed as a profit forecast.

Leavesden Park, Watford, UK (1)

Investor enquiries
Juliana Weiss Dalton, CFA
Investor Relations Director,
Kennedy Wilson Europe
+44 (0) 20 7123 5577
ir@kennedywilson.eu

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