Kennedy Wilson ( KW Quick Quote KW - Free Report) collaborated with Singapore’s sovereign wealth fund, GIC, for the acquisition and management of urban logistics properties in the U.K. Moreover, the joint venture (“JV”) is open to the possibility to expand into Ireland and Spain.
The JV will be started with a portfolio of 18 urban logistic assets in superior locations across the U.K. The $220-million portfolio is fully-owned by Kennedy Wilson at present. Additionally, the JV will eye investment opportunities in last-mile urban distribution centers, aiming for total assets of up to $1 billion.
Notably, Kennedy Wilson will have 20% stake in the JV and will be responsible for the sourcing, buyouts and management of assets. GIC will have the remaining 80% ownership in the collaboration.
Remarkably, the industrial and logistics asset class have been firing on all cylinders and have shown resilience amid the coronavirus pandemic, with low vacancy rates, high asking rents and robust rent collections. Moreover, there has been a significant increase in e-commerce’s share of total retail sales, and this is spurring the demand for warehouse and distribution spaces. Apart from this, the industrial real estate space is likely to gain traction over the long run from a projected rise in the inventory levels of companies as a precautionary measure for any potential supply-chain disruption. This, in turn, will likely keep supporting industrial landlords.
In fact, with rising e-commerce activities and supply-chain strategy transformations,Kennedy Wilson has seen robust growth in urban logistic properties. Moreover, capitalizing on this trend, the company has expanded its footprint in the logistic real estate asset class. In fact, per management, “we are thrilled to partner with a preeminent global long-term investor like GIC to further capitalize on the exciting opportunities in this sector and to build out a premier urban logistics portfolio.”
However, amid the pandemic-borne concerns, the company witnessed a year-over-year occupancy decline at its multifamily affordable same-property portfolio in the third quarter. Moreover, occupancy decline at its commercial portfolio has affected revenue growth.
Further, shares of this Zacks Rank #3 (Hold) company have lost 22.6% over the past year against the
industry’s rally of 21.1%.
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