The residential specialist has bought the 233-apartment PRS element of Bury’s The Rock from Kennedy Wilson Europe and Fairfax Financial for £22.1m, reflecting a net initial yield in excess of 5%.
Comprising 140,800 sq ft, the scheme includes a mix of studio, one-bedroom and two-bedroom flats and sits in the heart of the 550,000 sq ft Rock shopping centre.
The JV acquired the residential site as part of its acquisition of the loan on the overall shopping centre in late 2012, with direct ownership taken in September 2013.
With only the external envelope of the residential element in place, Kennedy Wilson undertook a comprehensive internal redevelopment to create 233 premium PRS units, achieving practical completion in phases over 2014 and 2015.
Mary Ricks, president and chief executive of Kennedy Wilson Europe, said: “The completion of this transaction demonstrates our ability to create and deliver an institutional residential product to the market. We sourced an attractive acquisition opportunity in what was a dislocated market in 2012 through our ‘asset via loan’ strategy coupled with our strong development capabilities to deliver a premium product to meet market demands.
“Our asset management team successfully leased up and stabilised the PRS operation to 97% occupancy highlighting our specialist PRS skills.”
Knight Frank Residential Capital Markets and Cripps advised Kennedy Wilson on the deal. Tuffin Ferraby Taylor advised Grainger.