Commercial core keeps its charm

Kennedy Wilson has confirmed that it is the new owner of the high-profile properties contained in the Treasury Holdings-linked Opera House Finance portfolio, which includes both the KPMG (above) and Bank of Ireland HQs in Dublin.

The Beverly Hills investor paid €306 million for the properties, which will be distributed to bondholders who bought €425 million in various classes of notes to finance the entire portfolio in 2006.

Yesterday’s statement noted that Kennedy Wilson and its partner “each contributed €60 million of equity in the transaction, and Bank of Ireland provided €199 million in financing”. That is a total of €319 million.

It looks like the other €13 million went on fees to various other parties involved in the sale. These would have included German bank, Eurohypo, which serviced the company's loans, and debt specialists Cairn Capital and law firm Sidley Austin, which it appointed to advise on the process.

The statement also gives some insight into what sort of weighting the investor gives the portfolio’s various elements. It says: “The portfolio value is represented by 64 per cent office and 36 per cent retail asset types, with six properties representing 93 per cent of the total”.

It adds that majority of the properties are located in Dublin 2 and 4, with just one (a Marks & Spencer store in Cork) outside the capital. The inference to be drawn from all of this is that commercial buildings in Dublin’s traditional central business district are what investors are seeking.

This is in line with what the promoters of the Green REIT said ahead of last week’s flotation in Dublin and also chimes with remarks from IDA chief Barry O’Leary, who recently said that there was a lack of suitable office space in the right locations for multinationals.