Kennedy Wilson Buys $1.8B Portfolio of London Loans

Kennedy Wilson, a Beverly Hills, Calif.-based real estate investment and services firm, and its institutional partners purchased a loan portfolio from the Bank of Ireland for $1.8 billion. The loans are secured by class-A office, retail and multifamily properties located in London.

Kennedy Wilson will complete the transaction in two phases. It has already closed on the first part of the acquisition valued at $1.4 billion on Oct. 21. At the end of November, it will close on an additional $400 million.

“This is a landmark deal for Kennedy Wilson,” Chairman and CEO William McMorrow said in a statement. “Under the leadership of Mary Ricks, our new team in Europe played a significant role in this success and the closing adds to our already strong base of business in Europe.”

Earlier this year, Kenned Wilson purchased Bank of Ireland Real Estate Investment Management, an asset management business. This latest transaction will bring the value of assets under Kennedy Wilson’s management to approximately $12 billion.

In the first half of the year, United Kingdom saw $24.3 billion in commercial property sales, representing a 14 percent increase over the same period last year, reports Real Capital Analytics, a New York City-based research firm.

Today London, along with New York and Hong Kong, is considered one of the world’s top three financial centers, according to a Global ViewPoint report from brokerage firm CB Richard Ellis. As a result, the city has experienced strong office leasing activity throughout 2010, accompanied by a 25 percent increase in prime office rents. Leasing momentum has slowed down this year, however, due to a more uncertain economic environment.

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