Danske Bank is set to appoint DTZ in Ireland to sell up to 15 Irish commercial properties, in the Danish bank’s latest tranche of enforced loans as the lender seeks to run-off its €1.8bn legacy Irish loan book by the end of 2014.
The strategy reflects Danske Bank’s belief that a greater capital recovery can be achieved for granular assets through sales of direct assets, rather than selling impaired loans in bulk to private equity fund, hedge funds, and wider property investors which tend to command steeper discounts.
Danske Bank’s Irish portfolio – known only as the Danske portfolio – is expected to come to market in the next two weeks, following the confirmation of DTZ’s mandate.
The Danske portfolio is understood to include: 25-26 Fitzwilliam Place in Dublin, The Globe Retail Park in Naas, County Kildare and Horizon Logistics Park in Dublin. There is also thought to be some industrial buildings and development land, near to Dublin airport, within the portfolio.
Fitzwilliam Place, a 60-strong executive service office property, is expected to be among the most sought-after assets, which the Danish Bank successfully enforced over last summer, after a legal ruling in November 2011 in its favour due to €64.8m in unpaid loan repayments as well as a legal wrangle over subletting.
DTZ’s Dublin investment team will be handling the sale, which is expected to invite offers for individual assets, small pools of assets, as well as the entire portfolio, which is expected to end up between 12 and 15-strong.
Several off-market enquiries are understood to have been fielded already, ahead of a likely public advertising sales process in the advertising section of the Irish press.
Danske Bank Irish commercial property portfolio is DKK 13.4bn (€1.8bn), which has a carrying value of DKK 5.3 (€710m), with the balance – DKK 6.1bn (€820m) – reflecting impairments already taken by the bank, as at the end of March.
The geographic weighting of the Irish commercial property book is 58% to 42% in favour of Dublin, versus non-Dublin property.
All Danske Bank’s Irish commercial real estate loans were transferred to its non-core unit, established in mid-2012.
Separately, Danske Bank still has around DKK 9.9bn (€1.33bn, £1.13bn) in Northern Irish commercial property loans, as at the end of 2012, which are assumed to have a carrying value of just DKK 1.7bn (€230m, £190m). However, the bank has, so far, only provisioned for DKK 3.0bn against these value falls (€400m, £340m).
Danske Bank and DTZ declined to comment.