KKR has agreed to acquire a 430,000 square foot Retail Park Portfolio from Resolution Property. Financial details of the transaction are undisclosed. KKR has selected Quadrant Estates as the retained Asset Manager. The UK-based portfolio is made up of multi-let retail warehouse space in strong locations in Oxford, Glasgow and Sunderland and contains a combination of food, shopping and retail outlets, as well as bulky goods consent.
Kohlberg Kravis Roberts & Co. L.P. today announced that entities advised or affiliated with KKR, including KKR Financial Holdings LLC (“KFN”) (NYSE: KFN), have agreed to acquire a 430,000 square foot Retail Park Portfolio from Resolution Property (“Resolution”). Financial details of the transaction are undisclosed. KKR has selected Quadrant Estates as the retained Asset Manager.
The portfolio is made up of multi-let retail warehouse space in strong locations in Oxford, Glasgow and Sunderland and contains a combination of food, shopping and retail outlets, as well as bulky goods consent.
Guillaume Cassou, a Director of KKR London and Head of the KKR Europe Real Estate team, said:
“We are excited to be announcing KKR’s first European property acquisition, and are delighted that it is in a strong portfolio which combines excellent locations and attractive opportunities for asset management. KKR is perfectly placed to develop the portfolio given the company’s experience and expertise in the retail sector with leading companies such as Pets at Home and Alliance Boots. We look forward to doing more such deals in the UK and Europe.”
The acquired assets have a strong income profile, with occupancy of 90% and a weighted average lease length of 10 years. The investment also provides operational upside through asset management, let-up, and lease re-gearing.
Christopher Daniel, Director of Quadrant Estates said:
“We have been actively looking at the retail warehouse sector for a long time and these three parks present a very interesting opportunity. They offer asset management value add and a good diversity of tenant mix. We’re pleased to be working with KKR on their first direct property investment in Europe, and combining with their experience and knowledge of the wider retail sector.”
KKR’s real estate investment team seeks to partner with real estate owners, lenders, operators and developers to provide flexible capital to respond to transaction-specific needs, including the outright purchase or financing of existing assets or companies and the funding of future development or acquisition opportunities. The team has access to multiple pools of capital and can invest in private and public real estate opportunities.
Jones Lang LaSalle is the adviser on the transaction.
The transaction is expected to close in the forthcoming weeks.
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Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $78.3 billion in assets under management as of March 31, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR), and “KKR,” as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate.
About KKR Financial Holdings LLC:
KKR Financial Holdings LLC is a specialty finance company with expertise in a range of asset classes. KFN’s core business strategy is to leverage the proprietary resources of its manager with the objective of generating both current income and capital appreciation. KFN executes its core business strategy through its majority-owned subsidiaries. KFN is externally managed by KKR Financial Advisors LLC, a wholly-owned subsidiary of KKR Asset Management LLC, which is a wholly-owned subsidiary of Kohlberg Kravis Roberts & Co. L.P. Additional information regarding KFN is available at http://www.kkr.com.
About Resolution Property:
Resolution Property was founded in 1998 with the specific aim of investing in UK and European commercial real estate that offers scope for high returns through a combination of good initial stock selection, active management, refurbishment and redevelopment potential.
About Quadrant Estates:
Quadrant is a private property development and investment company founded in 1997. Its strategy is to generate strong investor returns through intelligent asset selection and effective asset management. The company is acting as development and asset manager on a 2 million sq ft development pipeline valued in excess of £1 billion, including the 230,000 sq ft Moorgate Exchange, the 100,000 sq ft 100 Cheapside and the 135,000 sq ft Carmelite developments in Central London, the 1.25m sq ft Eureka Business Park, Ashford, the 450,000 sq ft mixed use development at Trafalgar Wharf, Portsmouth Harbour and the 130,000 sq ft Turner Rise Retail Park in Colchester. www.quadrantestates.com
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Source: Kohlberg Kravis Roberts & Co. L.P.