US-based property investment and services firm Kennedy Wilson has bought Bank of Ireland Real Estate Investment Management (BOI REIM).

BOI REIM manages commercial property on behalf of Bank of Ireland customers. The buy is Kennedy Wilson's first in Europe and will add €1.6 billion of assets to its portfolio.

As a result of the deal, Kennedy Wilson is to set up a new entity called Kennedy Wilson Europe, based in Dublin and London, to develop its business throughout Europe. This will be headed by current BOI REIM managing director Peter Collins.

Bank of Ireland is to retain Kennedy Wilson Europe to manage its current portfolio.

The bank said the price being paid for BOI REIM was not material to its recapitalisation. BoI has been disposing of assets as it attempts to raise just over €5 billion to meet new capital ratio requirements set out by the Central Bank in March.

Earlier this year the bank sold Bank of Ireland Asset Management to State Street Global Advisers for €57m. It also sold Bank of Ireland Securities Services to Northern Trust Corporation.