Kennedy Wilson Europe's portfolio value stays flat in first quarter

Kennedy Wilson Europe Real Estate saw no growth in its portfolio value in the first quarter but confirmed it was on track to deliver an annualised dividend of 48.0p per share.

Total portfolio value1 stood at £2.878bn at the end of March, almost unchanged from the £2.882bn at the end of last year.

The FTSE 250-listed group, which invests in real estate across the UK, Ireland, Spain and Italy with a portfolio of 219 properties, saw its annualised topped-up net operating income (NOI) of £161.9m fall from the £163.7m across 223 properties last year.

Property portfolio occupancy fell to 93.4% from 95% last year, although the weighted average unexpired lease term (WAULT) was up to 7.3 years from 7.1.

Kennedy Wilson Europe, which is merging with parent Kennedy-Wilson Holdings, bagged 36 commercial lease transactions in the period, delivering £3.0m of incremental annual income, 15.3% ahead of previous passing rents and 3.0% ahead of valuers' estimated retail values.

The period included Successful its largest rent review, with the Telegraph Media Group for its offices near Victoria station in London, which delivered 21% growth over previous passing rents.

Private rented sector (PRS) renewal and letting activity was strong over the period with 240 lease transactions completed, adding £1.6m of annualised NOI.

A quarterly interim dividend of 12.0 pence per share will be paid, as was announced last month.

With £442m of cash in the bank, net debt stood at £1.23bn, pretty much flat since the year end, with a weighted average interest rate of 3.0%, a weighted average term to maturity of 5.8 years and an loan-to-value ratio of 42.6%.

Chair Charlotte Valeur said: "KWE continues to deliver strong operational and asset management successes across the portfolio, underpinning the robust cash flows of the existing portfolio.

She said the quarterly dividend kept the company on track to deliver an annualised dividend of 48.0p per share.

Mary Ricks, president and CEO, said the portfolio continued to benefit from "strong underlying fundamentals" that allowed commercial lease improvements.

"We continue to deploy accretive capital expenditure across our own portfolio through our value enhancing refurbishment programme including the refurbishment of the third floor at BPR in London, a new reception at the Chase Building, the extension of the Tesco unit at Stillorgan and the redevelopment of School House Lane, all in Dublin.

She said the private rented sector operation was going "from strength to strength" in Dublin and London.