Kennedy Wilson completes purchase of Madrid shopping centre

Kennedy Wilson Europe Real Estate has completed the acquisition of a 95.2% stake in La Moraleja shopping centre in Madrid from ING Real Estate and other investors with an underlying real estate value of €71m (£52.2m), reflecting a yield on cost of 6.2%.

The centre is located in the north of Madrid and attracts 3.5m visitors a year, benefitting from its close proximity to a large work population from the adjacent business park and from its direct links to the affluent La Moraleja residential district.

Kennedy said the acquisition, which was funded from cash resources, represents its first shopping centre purchase in Spain, and brings its total Spanish portfolio to £155.4m across 20 assets.

Chief executive officer Mary Ricks said: “La Moraleja Green is one of Madrid's most established shopping destinations and provides KWE with significant value enhancing asset management opportunities. There are large reversions to be captured, both by letting up the vacant space and improving existing rents, which sit around 20% below its competition.”

The company also said on Monday that it has completed the acquisition of a portfolio of nine offices in Italy fully-let to the Italian government for a net purchase price of €185.5m, reflecting a yield on cost 6.3%.