Kennedy Wilson beats valuer estimates in third quarter

(ShareCast News) - Property investment company Kennedy Wilson Europe Real Estate posted its third quarter update on Friday, for the three months to 30 September, with total portfolio value standing at £3.07bn across 265 properties at period end.The FTSE 250 firm said that figure included two loan portfolios generating annualised topped-up net operating income of £167.1m.Its property portfolio occupancy was 95.0%, with a weighted average unexpired lease term of 7.3 years.A total of 31 commercial lease transactions delivered £1.9m of incremental annualised NOI, 10.7% ahead of the company's previous passing rents and 1.5% ahead of its valuers' estimated recovery values.Sales of £57.1m were completed across 13 properties, achieving an exit spread of 260 bps over entry yield on cost, at a 3.4% premium to book value and a return on cost of 45%.The board declared a quarterly interim dividend of 12p per share, delivering a total 48p per share for 2016.Group net debt stood at £1.25bn at period end, with a weighted average interest rate of 3.0%, a weighted average term to maturity of 6.3 years and a loan-to-value ratio of 40.8%.During the period, the company tapped its 2022 unsecured bonds by a further £200m, increasing the bonds to a total of £500m.It also repaid £156.3m of secured financing, increasing the proportion of unsecured debt to 56%, and announced a share buyback programme of up to £100m.Post period ending, the company completed £50.1m of share buyback and has cancelled 4.9 million shares to date.It also completed disposals for £17.3m, delivering a return on cost of around 30%, and completed twelve leases - 8.3% ahead of previous passing rents and around 1% ahead of the valuers' ERVs."The board remains focused on delivering total returns for shareholders and we are very pleased to announce a further dividend of 12p per share to be paid in Q4-16, which delivers on the 48p target for 2016, and reflects an attractive dividend yield of 4.7%," said Kennedy Wilson chair Charlotte Valeur."The share buyback programme of up to £100m illustrates KWE's commitment to balance sheet management and capital efficiency, particularly when capital markets remain turbulent, whilst leaving the company with sufficient liquidity to capitalise on potential future market opportunities."President and CEO of the company, Mary Ricks, said the team delivered strong operational performance across its leasing activities during the period, where Kennedy Wilson continued to beat valuers' ERVs, and on disposals where it was selling ahead of business plan and previous book values."Our diversified portfolio remains well let delivering robust cash flows with good lease lengths and plenty of value enhancing asset management opportunities."We have remained disciplined in committing new capital to date," Ricks added."We see opportunities to further grow the portfolio across all our geographies, with the UK in particular offering potential on repriced assets and Dublin as a beneficiary of potential Brexit relocations."