Kennedy Wilson Europe Real Estate (KWE) has announced a second tranche of asset disposals, with around £200m worth slated for sale by mid-2017, as the fast-maturing listed property company seeks to crystallise profits and redeploy proceeds in its favoured four jurisdictions.
KWE confirmed that it has closed sales of £261.9m worth of assets, including£137.5m of disposals since 31 December 2015, reflecting 87% of its £300m of sales pipeline announced last August. The sales delivered returns on cost averaging 23.1% over a 17 months holding period.
This morning, Mary Ricks, president and CEO of Kennedy Wilson Europe, confirmed a further tranche of £200m of UK asset will be sold next, expected to be completed by June 2017.
The announcement came as part of KWE’s second annual result this morning, in which a 14.6% increase in adjusted net asset value (NAV) to £1.59bn was reported, underpinned by a like-for-like valuation uplift of 11.5% and reflecting a valuation surplus of £211.8m.
Today, the KWE Board also announced an increase in the quarterly interim dividend of 20% to 12.0 pence per share or 48.0 pence annualised, representing a 37% uplift over 2015 and implying a dividend yield of 4.5%, as at 25 February 2016.
Ricks said of the performance KWE – which yesterday celebrated its second anniversary: “Capital recycling remains a high priority and we are targeting a further £200m of disposals by June 2017 as we crystallise on asset management completions and continue to prune the portfolio.
“Our business remains in robust operational health with ample liquidity. This will allow us to selectively capitalise on investment opportunities across our target regions that may arise from potential market dislocations, given the current volatile state of capital markets.”
KWE’s portfolio was valued at £2.79bn at year end, generating annualised NOI of £160.6m, comprised 282 directly-owned assets with a total area in excess of 11.8m sq ft, and a further 20 assets secured by three loans valued at £179.2m.
The listed property company continued to source direct assets and loans from non-core holders in its four favoured regions: the UK, Ireland, Spain and Italy.
Each market is at different positions in their respective property cycles “providing us with a wider menu of entry points,” the firm explains.
“We are conscious of the current uncertainty in global investment markets, exacerbated in the UK by Brexit concerns. At this stage, we are not seeing that uncertainty feed into our occupier base, which is well diversified across countries and sectors.
“We continue to actively monitor the risk of investment market volatility feeding into the underlying fundamentals in which we operate.
“Bearing this in mind, property fundamentals across the UK and Ireland remain positive and investments across offices as well as selected residential and retail properties in key cities continue to perform well.
“In Spain, we remain positive on consumers’ prospects and are pleased to have increased our retail exposure there, and in Italy, a market we entered in October 2015, we remain focused on offices and retail sectors in the north of the country and are seeing increasing opportunities.”