Kennedy Wilson Europe Real Estate has completed the purchase a £503m portfolio of 180 mixed-use properties across the UK from Aviva, reflecting a yield of 6.9%.

Mary Ricks

The London Stock Exchange-listed company has self-funded part of the deal and borrowed £352.3m from Aviva Commercial Real Estate Finance.

The senior debt facility reflects a loan to value on the portfolio of 70%.

The portfolio comprises around 3.5m sq ft. It is 98% occupied with a weighted average unexpired lease term of 9.6 years. It generates total net rental income of £36.1m.

Some 54% by value is weighted towards London and the South East and 5% towards Scotland and Wales.

Retail, food and convenience comprise 62% of the portfolio. Leisure, industrial, office and hotels make up the remainder.

Mary Ricks, president and chief executive of Kennedy Wilson Europe, said the deal, along with the financing, increased the company’s stabilised cash flow, reduced the group’s borrowing costs and extended the term to maturity.

“With a large number of asset management angles across the portfolio we look forward to employing our extensive real estate expertise to grow income and generate future value,” she said.