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Q3-16 Business Update

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 Q3 Business Update for the period from 1 July 2016 to 30 September 2016 (the “Period”).

Highlights in the Period:

  • Total portfolio value1 stands at £3,073.3 million across 265 properties including two loan portfolios generating annualised topped-up NOI of £167.1 million
  • Property portfolio occupancy of 95.0% with WAULT of 7.3 years (9.3 to expiry)
  • 31 commercial lease transactions delivered £1.9 million of incremental annualised NOI, 10.7% ahead of previous passing rents and 1.5% ahead of valuers’ ERVs
  • Sales of £57.1 million completed across 13 properties, achieving an exit spread of 260bps over entry yield on cost, at a 3.4% premium to book value and a return on cost of 45%
  • Quarterly interim dividend of 12.0 pence per share, delivering 48.0 pence per share for 2016
  • Group net debt of £1,255.0 million with a weighted average interest rate of 3.0%, a weighted average term to maturity of 6.3 years and an LTV of 40.8%
  • Tapped KWE’s 2022 unsecured bonds by a further £200 million, increasing the bonds to a total of £500 million
  • Repaid £156.3 million of secured financing, increasing the proportion of unsecured debt to 56%
  • Announced share buyback programme of up to £100 million

Post Period end achievements:

  • Completed £50.1 million of share buyback and cancelled 4.9 million shares to date
  • Completed disposals for £17.3 million, delivering a return on cost of c. 30%
  • Twelve leases completed, 8.3% ahead of previous passing rents and c. 1% ahead of valuers’ ERVs

Charlotte Valeur, Chair of Kennedy Wilson Europe Real Estate Plc, commented: “The Board remains focused on delivering total returns for shareholders and we are very pleased to announce a further dividend of 12.0 pence per share to be paid in Q4-16, which delivers on the 48.0 pence target for 2016, and reflects an attractive dividend yield of 4.7%. The share buyback programme of up to £100 million illustrates KWE’s commitment to balance sheet management and capital efficiency, particularly when capital markets remain turbulent, whilst leaving the Company with sufficient liquidity to capitalise on potential future market opportunities.”

Mary Ricks, President and CEO of Kennedy Wilson Europe, added: “The team has delivered strong operational performance in the Period across our leasing activities, where we continue to beat valuers’ ERVs, and on disposals where we are selling ahead of business plan and previous book values. Our diversified portfolio remains well let delivering robust cash flows with good lease lengths and plenty of value enhancing asset management opportunities. We have remained disciplined in committing new capital to date. We see opportunities to further grow the portfolio across all our geographies, with the UK in particular offering potential on repriced assets and Dublin as a beneficiary of potential Brexit relocations.” 

1. Portfolio value is based on valuation by external valuers CBRE & Colliers (for direct property portfolio) and Duff & Phelps (for loan portfolio) at 30-Jun-16 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. The property valuations do not take into account the impact on property investment and letting markets from the UK’s EU membership referendum held on 23 June 2016.


Kennedy Wilson
151 S. El Camino Dr.
Beverly Hills, CA 90212

Phone: +1 (310) 887-6400
Fax: +1 (310) 887-3410