Kennedy Wilson ramps up European business

The Beverly Hills-based firm has struck up a €250 million joint venture with Fairfax Financial to buy European commercial real estate assets, including loans and real property.

Kennedy Wilson, the California firm that entered the European market last year via a corporate acquisition, has added a joint venture with Canadian financial services company Fairfax Financial to boosts its operations in the region. The Beverley Hills-based firm revealed that the new joint venture initially would focus on the UK and Ireland, with Fairfax providing the €250 million capital commitment and Kennedy Wilson injecting a 10 percent co-investment.

Explaining the non-discretionary arrangement, Kennedy Wilson said the Europe joint venture followed a $278 million US real estate partnership, which now is fully invested. Fairfax chairman and chief executive Prem Watsa added in a statement: “We are pleased with our US commercial real estate partnership with Kennedy Wilson and look forward to investing in European assets through this new platform.”

Adding more detail, Kennedy Wilson said it would play the “lead role” in sourcing, negotiating and executing the acquisition of investments, while Fairfax will review and approve all deals.

Kennedy Wilson is accelerating its growth in Europe after completing $3.7 billion in deals in the UK and Ireland since entering the market. Its signature deal came towards the end of 2011 when, after taking over the Bank of Ireland's property investment management business in June 2011, it agreed to acquire a $1.8 billion loan portfolio from the troubled Irish bank. The majority of the assets in the portfolio were secured by Class A office, multifamily and retail properties in London.

At the time, Kennedy Wilson's chief executive William McMorrow called it a “landmark deal for Kennedy Wilson.”