Kennedy Wilson Europe sees Brexit opportunities for Dublin

London-listed fund’s Irish derived revenues fell to £69m from £73.9m in first half of 2016

Kennedy Wilson Europe Real Estate acquired the Chase office block in Sandyford for €62.5 million in May

Kennedy Wilson Europe Real Estate acquired the Chase office block in Sandyford for €62.5 million in May

 

Property investment group Kennedy Wilson Europe, which has more than 200 commercial and private-rented sector leases in Dublin, said rental income rose sharply in the first six months of the year.

The London-listed fund said income derived from its Irish portfolio was down versus the same period a year earlier, falling from £73.9 million (€87 million) to £69 million (€81 million).

Irish-derived rental income totalled £19 million at the end of June, versus £13 million for the same period a year earlier. Hotel revenue was unchanged at £2.8 million.

Opportunities

Kennedy Wilson Europe said Dublin is well-placed to benefit from potential job relocations and additional foreign direct investment opportunities that may arise, as companies look to realign their geographic footprint following the Brexit vote. It said this should increase demand for offices and the private rental sector,.

The London-listed fund, which last year reported double-digit rental growth in Ireland, said its Irish portfolio performed “positively” during the first six months of the year.

The company, which also operates in the UK, Italy and Spain, saw its adjusted net asset value (NAV) rise 5.1 per cent to €1.2 billion over the first half.

Group net operating income rose by 35 per cent to £78.7 million in the first six months of the year.

Its portfolio was valued at £3 billion with annualised net operating income of £161 million, a 95 per cent occupancy rate and weighted average unexpired lease term (Wault) of seven years at the end of June.

Kennedy Wilson Europe acquired Bank of Ireland’s real-estate business in 2011. Its portfolio includes Stillorgan Shopping Centre, Baggot Plaza and Portmarnock Hotel and Golf Links. The company recently spent €76.9 million on two suburban office assets in Dublin in Sandyford and Blackrock.

Irish-derived revenues totalled £128.9 million for the group in 2015.

Strong activity

Kennedy Wilson Europe said a further 12 pence per share dividend is to be paid in the third quarter, adding it is on track to deliver 48 pence per share annualised target for 2016, a 37 per cent increase on last year.

The fund said it was too early to determine the impact of the EU vote on the British property market, but said activity levels across that part of the business remains strong.

“With 42 per cent of our portfolio based in Ireland, Spain and Italy, our asset base and income stream is diversified both geographically and by sector to provide additional security. Our UK portfolio remains robust and continues to deliver strong asset management momentum with 12 leases completed after June 23rd delivering additional income of £900,000 and 6.1 per cent ahead of valuers’ estimated recovery values (ERVs), with more to come,” said Mary Ricks, president and chief executive of Kennedy Wilson Europe.