NAMA has appointed Jones Lang LaSalle to sell Central Park, the suburban office park on the outskirts of Dublin City centre formerly owned by Treasury Holdings, which is expected to fetch around €250m and draw interest from public and private equity investors as well as sovereign wealth funds.
JLL was appointed this week to sell the entire Central Park portfolio, after a competitive tender process, extending the agent’s existing mandate which previously was limited to the sale of the 75,679 sq ft Block D at the office campus (pictured below), which is let to Bank of America and Merrill Lynch (BAML).
While NAMA and JLL would not confirm the appointment, yesterday NAMA issued a press release regarding the redemption of €750m of senior debt next week in which Ireland’s bad bank stated: “NAMA debtors and receivers have sold over 2,000 individual properties in Ireland and are actively seeking buyers at present for Irish residential and commercial property worth €1.5bn.
“This will increase by up to €400m in the coming weeks when two portfolios – mainly high quality offices and residential property – will be brought to market.”
CoStar News understands that Central Park in Leopardstown is one of those two portfolios, while the second is separate to Project Club, for which the sale process – after further delays – is now underway.
Central Park in total comprises five constructed office properties, a 282-strong residential block and a circa 6.5-acre development site. The five offices are:
- the 195,460 sq ft Number One Central Park, in which Tullow Oil occupies the top three floors as its corporate headquarters;
- the 76,015 sq ft block B is let to Ulster Bank Group, the RBS subsidiary;
- the 72,510 sq ft block C includes space taken by BAML, as well as Volkswagen Bank and Leaseplan Fleet Management Services;
- the 75,679 sq ft block D is let to Bank of America and Merrill Lynch (BAML);
- the 262,972 sq ft Vodafone corporate headquarters office block,
Ireland’s largest single-let building.
Central Park also includes a multi-family residential block with 282 units, from which 10 units were sold to private individuals and which could reduce the appeal to bidders who would prefer to own all units.
The 6.5-acre development site with planning permission already approved will appeal to investors which would look to create value to drive internal rates of return (IRR).
The annual gross rent across Central Park is currently around €15m.
NAMA’s decision to sell Central Park as a portfolio, rather than the individual assets piecemeal, reflects a belief that the portfolio will sell for a better overall price together, driven by an emerging price tension among overseas investors seeking to capitalise on the nascent recovery in Irish commercial property markets and the need to put capital to work.
Among the likely investors expected to bid on Central Park are thought to include Kennedy Wilson and Varde Partners, Blackstone, Lone Star, Northwood Investors, London & Regional, as well as Ireland’s maiden REIT, Green REIT, likely in a joint venture with a private equity partner, such as TPG.
In addition, the Qatar Investment Authority is also understood to be interested in Central Park.
The financing of Central Park could define the price achieved by NAMA.
Bidders could seek to secure domestic bank finance, for which the largest loans have been written in the last 12 months by Bank of Ireland, including the €199m senior loan to finance Kennedy Wilson’s protracted acquisition of the former Treasury Holding’s Castle Market Dublin office portfolio.
However, if NAMA decide to offer vendor finance, it could feasibly offer more competitive pricing on the senior loan than either domestic or overseas banks, due to the bad bank’s own low cost of capital, thereby engineering a higher sale price.
Treasury Holdings, founded by Johnny Ronan and Richard Barrett, failed in its attempt to block NAMA’s decision to appoint receivers over its €2bn property portfolio, including Central Park, this July.
Brendan McDonagh, chief executive of NAMA, told Ireland’s Committee of Public Accounts yesterday that a rump of around €900m of property assets and land is expected to remain at the very end of its targeted 2020 wind-down completion date.
All parties declined to comment.