Realty Income and KKR Launch €528M European JV

Realty Income Corporation and KKR have formed a new euro-denominated joint venture focused on European net lease real estate.

KKR will invest €528 million to acquire a 49% equity interest in the venture.

Realty Income will retain a 51% ownership stake and continue managing the portfolio through its European operating platform.

The transaction is expected to close on September 30, 2026, subject to customary closing conditions.

The joint venture will hold a portfolio of existing properties across Spain, Ireland, Poland and the Netherlands.

Portfolio Covers 54 European Properties

The anticipated portfolio includes 54 properties and 140 units. The assets cover a range of industries and tenant categories, including grocery, transportation services, home improvement, home furnishings and automotive parts.

The portfolio is expected to generate approximately €67.7 million in first-year cash annual net operating income.

Its weighted average remaining lease term stands at 7.2 years.

Investment-grade exposure accounts for 59% of the portfolio's base rent. Contractual rent growth is expected to average 1.6% annually, based on portfolio metrics as of June 30, 2026.

Also Read: Skanska Breaks Ground on New Krakow Office Complex

Realty Income to Continue Managing Assets

Realty Income will continue to manage the properties under a long-term management agreement.

The portfolio is being contributed at an effective initial cap rate of 5.9% after recurring asset management fees.

The structure allows Realty Income to retain majority ownership and day-to-day asset management while bringing institutional capital into the European portfolio.

KKR's investment will provide Realty Income with approximately €528 million in gross proceeds.

Also Read: ATAL Launches Second Phase of Gdansk Housing Project

Joint Venture Expands European Investment Strategy

The transaction extends Realty Income's private capital strategy into Europe.

The company said the partnership will diversify its capital sources beyond public markets while supporting its European growth strategy.

KKR said the structure provides flexibility to expand alongside Realty Income's future requirements.

The partnership adds another institutional investment platform to Europe's net lease property market.

Realty Income had more than 15,500 properties across the US, UK and eight other European countries as of June 30, 2026.

The latest joint venture adds to its broader European investment and management platform.

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