Australian fund manager set to take on 344m Europe fund, while Hansteen bids for 333m industrial fund
The European empire of the collapsed Kenmore Property Group began to unravel this week.
Valad Property Group, the Sydney-based fund manager, is poised to take over the management of the 344m Kenmore Europe fund and Hansteen, the industrial property REIT, is closing in on the 333m Kenmore European Industrial Fund.
Valad is understood to have been picked by Kenmore Europes co-investors, Lloyds Banking Group and Revcap, to take over the fund management role from Kenmore Financial Services, which is not in administration.
Kenmore Europe owns around 60 properties 35% of which are based in Germany, 15% based in the Netherlands and the balance across the Nordic countries. Around 70% are multilet offices and industrial, while the rest is retail.
As well as being a major backer of Kenmores expansion, Bank of Scotland Corporate which is now part of Lloyds Banking Group is also an investor in joint venture funds with Valad. In June Lloyds formed a 1.1bn joint venture vehicle with Valad, called Duke, as part of the restructuring of its European business. The Kenmore Europe fund would be held separately to Duke.
The Kenmore European Industrial Fund (KEIF) owns 333m of properties, mainly in France, Norway, Belgium and Sweden. On Wednesday it was subject to a takeover approach from Hansteen.
Hansteen, which is run by Ian Watson and Morgan Jones, bought a 12% stake in KEIF on Tuesday from Edinburgh-based Knowe Properties for 6.8m in cash and shares. This equated to 40.6p for each of KEIFs shares.
An offer for the whole of KEIF at 40.6p a share would value the fund at 56.8m and at a 24% discount to the net asset value of 53.5p a share after deferred tax is excluded. Based on an annual rent roll of 21m, the implied yield would be 11%.
It will be interesting to see if [Wednesdays] announcement flushes out any other bidders at what appears to be an attractive valuation for a prospective purchaser, said Michael Burt, property analyst at Noble.
Hansteen clearly has a major leap on the competition via its 12% strategic stake and has the advantage of an established European asset management platform to leverage.
The strategic stake taken in KEIF follows the acquisition of 18.5% of Warner Estate in August. The potential fit with KEIF is very strong for Hansteen. Both portfolios are focused on industrial and spread across continental Europe.
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