Real estate investment firm Kennedy Wilson, in partnership with Minneapolis-based hedge fund Varde Partners, has acquired out of administration a portfolio of eight shopping centers throughout England and Scotland for £250 million ($388 million).
Kennedy Wilson provided £34 million of the total £110 million equity contribution, with £163 million in financing provided by Bank of America Merrill Lynch. Seven of the eight properties have transferred, and the final shopping center is set to do so soon, subject to customary closing procedures.
The properties total 2.3 million square feet, with 85 percent of the portfolio’s gross income coming from national retailers such as Debenhams, Marks & Spencer, Tesco and Primark. In a statement, Kennedy Wilson described its plans for the malls, which include “increasing occupancy, extending short-term leases by attracting a broader range of retailers, upsizing key anchor stores, improving the food and leisure offering and upgrading the physical environment of the mall areas.”
“There is the opportunity to benefit from improving economic and market conditions, including rental value improvement and yield compression to add value,” said Mary Ricks, president and chief executive officer of Kennedy Wilson Europe. “We see impressive potential in this investment and look forward to capitalizing on strong interest from retailers.”
The Beverly Hills-based investment firm, along with its institutional partners, has acquired more than $2.6 billion of real estate and real estate-related debt globally since the start of this year, including $1.9 billion of assets in the UK and Ireland.