Less than seven months after it raised £1bn in a Stock Exchange offering Kennedy Wilson Europe has spent almost £300m on a cross-sector property portfolio.
One of the biggest assets of the Fordgate Jupiter portfolio — sold through a commercial mortgage backed securities loan enforcement — is the 320,000 sq ft Regent Centre in Gosforth, Newcastle, and follows the company’s acquisition of Vantage Point at the city’s Balliol Business Park earlier in the summer.
Reported to generate around £25m in annual rents, the package is made up of 21 assets located across the UK and includes nine offices blocks, two mixed-use developments, five car showrooms, three leisure complexes, one retail site and one warehouse.
In a statement the company which, prior to its London flotation, had focused much of its attention on Spain and Ireland, said: “The portfolio is let on 167 leases to a number of blue chip companies including HSBC, Chevron UK, Conoco and the Secretary of State for the Environment. Its top six tenants accounting for over 50 per cent of the gross rental income.”
Mary Ricks is president and chief executive officer at Kennedy Wilson Europe. “This transaction illustrates our unique ability to invest across asset class, capital structure and different instruments to access and control quality real estate assets,” she explained.
“The highly visible and secure income, complemented by strong underlying tenancies, together with a number of asset management plans, including leasing efforts, which we have already identified in the portfolio, make this an extremely attractive investment for us.”
Originally developed by North British Properties in the 1970s and at one time the largest office complex in Europe, the Regent Centre is a large business park to the north of Newcastle city centre. It was rebranded in 2008 with the slogan “Better for Business” and has since attracted 30 new lettings.
It currently houses the regional headquarters of HM Revenue & Customs as well as the DVLA and Health & Safety Executive. Other tenants include the Labour Party and international construction consultancy Gleeds. One new arrival is the head office of the recently launched Virgin Money banking group.
“This investment is good news for the Newcastle office market and is a clear indication that activity is returning to the North-East office sector,” commented Tim Evans, a partner at Knight Frank and joint agent with BNP Paribas Real Estate of the nine-building Regent Centre.
“The centre has been one of the region’s most important office locations for many years attracting, during that time, some of the North-East’s best-known and most successful companies,” Evans said, adding that one key factor of the site’s success was its proximity to Newcastle International Airport.
“The Regent Centre is a widely-known and highly regarded office location with outstanding connectivity,” he stressed, “and the presence of Emirates, the award-winning Dubai-based carrier, has given a major boost to travel and trade in the region, establishing Newcastle on the long-haul map of the world and further emphasising the exceptional locational qualities of Regent Centre,”
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