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Q1-17 Business Update

5 May 2017

Kennedy Wilson Europe Real Estate Plc (LSE: KWE), an LSE listed property company that invests in real estate across the UK, Ireland, Spain and Italy, today announces its Q1 Business Update for the period from 1 January 2017 to 31 March 2017 (the “Period”).

Highlights in the Period:

  • Total portfolio value1 stands at £2,878.2 million across 219 properties including two loan portfolios, generating annualised topped-up NOI of £161.9 million
  • Property portfolio occupancy of 93.4% with WAULT of 7.3 years (9.2 years to expiry)
  • 36 commercial lease transactions signed delivering £3.0 million of incremental annual income, 15.3% ahead of previous passing rents and 3.0% ahead of valuers’ ERVs
  • Successful conclusion of our largest rent review with the Telegraph Media Group at 111 Buckingham Palace Road (BPR), delivering 21% growth over previous passing rents
  • Quarterly interim dividend of 12.0 pence per share, as announced on 28 April 2017
  • Group net debt of £1,226.6 million with a weighted average interest rate of 3.0%, a weighted average term to maturity of 5.8 years and an LTV of 42.6%
  • Ample liquidity with £442.0 of cash and £225.0 million of undrawn facilities

Highlights post Period:

  • £40.1 million of disposals completed, including post Period end, delivering a return on cost of 35.2% and a premium over book value of 5.4%
  • 11 commercial leases completed, 2.9% ahead of previous passing rents and 11.0% ahead of valuers’ ERVs; with 32 deals in solicitors’ hands, which would add c. £1 million of incremental annual income when complete
  • On 24 April 2017 KWE and Kennedy-Wilson Holdings, Inc. announced a recommended all-share merger – details can be found on KWE’s website kennedywilson.eu/investors/kwhi-and-kwe-proposed-merger/. The Scheme Document will contain updated valuations reported on in accordance with Rule 29 of the UK Takeover Code.

Charlotte Valeur, Chair of Kennedy Wilson Europe Real Estate Plc, commented:

“KWE continues to deliver strong operational and asset management successes across the portfolio, underpinning the robust cash flows of the existing portfolio. The Board was pleased to announce an interim quarterly dividend of 12.0 pence per share for the Period, which sees the Company on track to deliver an annualised dividend of 48.0 pence per share. The Board believes the current dividend is both sustainable and offers an attractive dividend yield.”

Mary Ricks, President and CEO of Kennedy Wilson Europe, added:

“The portfolio has continued to benefit from strong underlying fundamentals, which has translated into another active quarter of commercial lease transactions with big wins at Buckingham Palace Road, Watford and Stillorgan in Dublin. We continue to deploy accretive capital expenditure across our own portfolio through our value enhancing refurbishment programme including the refurbishment of the third floor at BPR in London, a new reception at the Chase Building, the extension of the Tesco unit at Stillorgan and the redevelopment of School House Lane, all in Dublin.

“Our PRS operation is going from strength to strength delivering strong NOI uplifts at both Vantage in Dublin and Pioneer Point in London, where we are offering a professionalised product that is unique to each of these submarkets. We are particularly pleased with the progress of our large capital expenditure programme at Pioneer Point, where we have delivered the South tower and are relaunching the building in June 2017 with new exciting tenant amenities, which will clearly differentiate the offering.”

1. Portfolio value is based on valuation by external valuers CBRE & Colliers (for direct property portfolio) and Duff & Phelps (for loan portfolio) at 31 December 2016 adjusted for acquisitions, capital expenditure and disposals in the Period; the investment portfolio is revalued on a semi-annual basis, at 30 June and 31 December each year, by third party external valuers appointed by the Group.

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