Bank of Ireland Real Estate Investment Management (BOI REIM) has been bought by international real estate investment and services firm Kennedy Wilson.

The acquisition of BOI REIM, which manages commercial real estate on behalf of Bank of Ireland clients, will add some €1.6 billion of real estate assets to the Kennedy Wilson's $7.4 billion of investment assets in the US and Japan, and allow the firm to develop its business in Europe.

The purchase is the first Irish or European business that Kennedy Wilson has made, and will lead to the establishment of Kennedy Wilson Europe, which will operate from London and Dublin. Current managing director of BOI REIM Peter Collins will head up the new entity.

"Building on our success and reputation in the management of real estate investments in the United States and Japan, Kennedy Wilson has identified opportunities for growth throughout Europe including an initial focus on Ireland," said chief executive William McMorrow.

Mr Collins welcomed Bank of Ireland's decision to retain Kennedy Wilson Europe to continue to manage the current portfolio.