KWE acquires Towers Business Park for £82m
5 May 2016
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, has completed the acquisition of Towers Business Park, South Manchester from Lone Star, for £82 million, reflecting a topped-up yield on cost of 6.7%. The acquisition will be funded from the Company’s existing cash resources.
Towers Business Park comprises ten prime suburban offices totalling 289,100 sq ft located in South Manchester, providing fast and convenient connectivity to Manchester City Centre and Airport. The offices are let to 21 high quality corporate occupiers, including John Lewis, British Airways, Honeywell, Oracle, Syngenta and Cisco. The top ten tenants represent 86% of topped up rental income and have been in occupation on average in excess of nine years.
The portfolio is 96% let and the majority of leases benefit from five-yearly upward-only rent reviews and a WAULT of 5.0 years (6.5 years to expiry).
Mary Ricks, President and CEO of Kennedy Wilson Europe, commented:
“The acquisition of Towers complements our existing suburban office portfolio acquired in the South East of England in July 2015. The portfolio provides best in class location, quality and blue-chip tenant roster with significant value-enhancing asset management angles.
“We expect to deliver c. 20% reversion between passing rent and ERVs. Upon completion of asset management plans, we anticipate the stabilised yield to grow to c. 8%.”