Thursday 22 August 2019

Kennedy Wilson targets buy-to-rent sector in JV

Mary Ricks, President and CEO of Kennedy Wilson Europe
Mary Ricks, President and CEO of Kennedy Wilson Europe
Donal Buckley

Donal Buckley

Kennedy Wilson (KW) which swept into Ireland at the bottom of the market has formed a joint venture targeting the Irish buy-to-rent sector with AXA Investment Managers - Real Assets.

The JV will immediately become one of the country's biggest landlords, with 1,173 dwellings at three Dublin sites contributed by Kennedy Wilson.

These include 210 apartments at The Alliance, the landmark circular apartment block developed by Liam Carroll in Ringsend; 119 units at Sandford Lodge in Ranelagh as well as 423 apartments and 163 houses at Clancy Quay near Heuston Station where Kennedy Wilson plans 259 more units.

A 2015 analysis by Savills suggested that Kennedy Wilson may have paid €180,000 to €225,000 on average per unit in 2012 for apartments in The Alliance Building in Dublin 4 and Sandford Lodge. Those units could now be worth more than double those values

In addition to those three sites Kennedy has a portfolio of about 900 other units in Dublin and last month agreed to buy 274 apartments and a development site at Grange in Stillorgan, south Dublin for €160m - €25m over its guide price. It also owns the Vantage apartment building in Leopardstown and is completing 190 residential units at the Capitol Dock site in south docklands.

Last year the group said it hoped to increase its residential rental portfolio of Irish properties to about 5,000 in the next three to four years.

Joining forces with AXA could provide funding for Kennedy Wilson to develop more rental properties such as at its Stillorgan site or engage with other developers which have planning permission for apartment blocks.

A statement from the new partners says they will target PRS development and investment opportunities across Ireland, both in Dublin and other large urban centres. Kennedy Wilson will act as overall asset manager for the venture.

Mary Ricks, President and CEO of Kennedy Wilson Europe, said: "Strong economic growth and favourable demographic trends underpin continuing demand for rental units in Ireland, where we aim to play a significant role in bringing much-needed new supply to the rental market.

"Our immediate focus is on increasing the number of high-quality rental units in the portfolio, through both acquisition and development activity and further cementing our reputation as the leading PRS operator in the market."

Kennedy Wilson has focused mainly on developments in upmarket areas of the capital, kick-starting projects well before the market recovery got underway.

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