Kennedy-Wilson Holdings, Inc. (NYSE: KW) disclosed that it has bought a Waverleygate which is a wholly-owned prime office building in Edinburgh. The company has bought the landmark Edinburg office building from the real assets investment manager PATRIZIA for $106 million, not including closing costs.
Presently, Waverleygate generates nearly $6 million of annual net operating income. It has commenced a substantial renovation in 2004 that made it nearly 203,400 square feet of modern open-plan office space across eight floors and maintained the Grade A listed Italian Renaissance façade.
Furthermore, Waverleygate is a renowned office building in the heart of Scotland's capital city, with national credit-worthy clients such as Amazon, Microsoft, H&M, the Scottish Government, and the National Health Service occupying 97 percent of the space. Kennedy Wilson will make a substantial investment in the property to offer first-class facilities and take advantage of the enormous growth opportunities in the Edinburgh market, which has a Class A vacancy rate of 2% in Edinburgh City Centre.
Additionally, Waverleygate is located next to Waverley train station, Edinburgh's principal railway station, and provides good connectivity for all kinds of transportation, particularly walking and cycling. It's close to the St Andrew Square tram stop, which provides direct access to Edinburgh International Airport, and it's directly across the street from the $1.3 billion St James Quarter mixed-use development, which adds to the area's amenities.
Kennedy Wilson disclosed that this acquisition illustrates its belief that, at present pricing levels, the UK office market offers compelling value, notably for assets located in key employment centers with high-quality educational institutions. Waverleygate offers instant additional income from a robust tenant base, as well as many chances to increase NOI and asset value by improving the property's environmental credentials and general management.