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Kennedy Wilson Europe Real Estate (KWE) has confirmed the acquisition of La Moraleja Green shopping centre in Alcobendas, near Madrid, from Dutch bank ING.

KWE has acquired a 95.2% stake in the centre with an underlying real estate value of €71 mln, reflecting a yield on cost of 6.2%. The corporate acquisition was funded from the company’s cash resources.

PropertyEU reported in November that Moraleja Green was changing hands once again. The asset was sold in November 2014 by CBREGI to ING for €68 mln. The banking group used to be one of the largest developers of and investor in European real estate but in recent years has been withdrawing from real estate activities - apart from financing. Its wind-down arm, ING Real Estate & Other, sold Moraleja Green to KWE.

Completed in 1995 by developers Metrovacesa and BBV Inmobiliario, Moraleja Green provides 29,600 m2 of space. including a 1,400 m2 luxury supermarket owned and occupied by Sanchez Romero. La Moraleja Green is organised over three levels providing 1,296 parking spaces and over 80 retailers, cafes, bars and restaurants as well as an eight-screen Cinesa cinema. The mall is 80% let with a weighted average unexpired lease term of 1.8 years (6.8 years to expiry), generating a net operating income of €4.5 mln per annum.

The acquisition represents KWE's first shopping centre purchase in Spain, and brings its total Spanish real estate portfolio to £155.4 mln across 20 assets representing 5.8% of the total £2.6 bn portfolio. The deal follows Kennedy Wilson's acquisition of a portfolio of 16 supermarkets in Spain from a joint venture between French institutional investors managed by AEW Europe.

Mary Ricks, president and CEO of Kennedy Wilson Europe, said that 'there are large reversions to be captured in the mall, both by letting up the vacant space and improving existing rents, which sit circa 20% below its competition'. 'On completion of our capex programme and leasing initiatives we anticipate growing our yield on cost to 7.0%,' she added.

Erik Vester, global portfolio manager investments of ING Real Estate, commented: 'The divestment of La Moraleja fully resonates with our strategic objective to reduce our real estate equity exposure globally and implies another important milestone to accomplish the aforementioned. The remaining Spanish real estate investment portfolio predominantly consists out of a mixed use land bank portfolio of 450,000 m2.'

Cushman & Wakefield and Dentons advised the buyer on the deal, while Deloitte and DLA Piper acted for the vendor.

Separately, KWE has announced that it has completed the acquisition of a portfolio of nine offices in Italy for a net purchase price of €185.5 mln, reflecting a yield on cost of 6.3%.

The portfolio comprises nine office buildings 100% occupied by Italian government ministries, across 99,200 m2 of lettable space, generating a day one NOI of €12.1 mln. The The unexpired lease term is 7.1 years with all the existing leases expiring simultaneously in December 2022.

The buildings are among the 21 assets offered for sale by Fondi Immobili Pubblici (FIP), a state-owned fund managed by Investire Immobiliare Sgr.

The portfolio is now held by a closed-end real estate alternative investment fund named Olimpia Investment Fund, wholly-owned by KWE and managed by Savills Investment Management SGR.