Three-strong shortlist submit final bids for NAMA’s €250m Project Club next week

Final bids are due next week for NAMA’s €250m Project Club with a final three-strong shortlist comprising Patron Capital, Castlelake formerly named TPG Credit and a majority-led CarVal Investors joint venture bid with its loan servicing partner Pepper Asset Servicing.

NAMA logoProject Club, secured by a series of bilateral loans to Irish property developer and investor Eamon Duignan, has been trailed since the turn of the year with Patron Capital installed as the most likely buyer virtually since the non-performing loan (NPL) portfolio was first constructed for sale.

CoStar News understands that the portfolio is likely to trade at around a 70% to 75% discount, or between 25 to 30 cents in the euro, which implies a cash purchase of between €62.5m and €75m.

Project Club is comprised of a series of retail properties and development sites within the commuter belt of Dublin.

All the loans, which are thought to number less than 10, are past due.

The significant development opportunities within Project Club is likely to lead to the winning bidder aligning with local joint venture development partners, all seeking to capitalise on the nascent recovery in Irish commercial property markets.

Following NAMA’s sale of the €810m Project Aspen at the turn of May to a Starwood Capital-led consortium, in which NAMA sold an 80% equity stake for €64m and retained the balance, single-borrower NPL sales came under some scrutiny amid concerns that borrowers were teaming up with potential buyers, undermining the reputability of NAMA’s processes.

CBRE is managing the sale of Project Club, in the second NPL sale process for Ireland’s bad bank after the aborted sale of the €600m Project Island NPL to Orion Capital Managers in summer 2012, which was secured by 40 development loans extended to property developer Cyril Dennis.

NAMA is also currently selling two Dublin direct property portfolios: the entire Central Park scheme, the suburban office park on the outskirts of Dublin City centre formerly owned by Treasury Holdings, and €120m Platinum Portfolio, a five-strong Dublin city centre office portfolio.

Central Park asking price rises to €250m

Jones Lang LaSalle was appointed to sell Central Park by NAMA around six weeks ago, as reported by CoStar News, with Savills joining the investment sales ticket within the last two to three weeks when NAMA decided to enlarge the portfolio with an additional residential scheme for which planning permission remains current.

Central Park – now with an asking price of €250m – is comprised of five constructed office properties, six multi-family blocks comprising 281 residential flats, which produces €3.8m per annum, and a detached two-story retail building, plus a mixture of office, retail and leisure units within the multi-family element providing approximately 38,000 sq ft of space.

The five built offices is multi-let, with 27 tenancies providing a current annual rent roll of approximately €13.9m per annum, increasing to over €15.2m following expiry of rent free periods.

They comprise:

  • the 195,460 sq ft Number One Central Park, in which Tallow 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 Lease plan Fleet Management Services;
  • the 75,679 sq ft block Do 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.

There is also current planning permission for three detached office buildings of approximately 707,000 sq ft, and also a partially-developed multi-family block with planning for 166 apartments and ancillary commercial space.

The revised guide price for Central Park – which has increased by €50m since the summer – is driven by the slightly enlarged portfolio and the continued yield compression for Dublin offices and the emergence of rental growth which is increasing pricing expectations.

Total current income from the scheme is approximately €17.98m per annum rising to over €19.34m per annum on expiry of rent-free periods.

JLL and Savills, which are seeking full portfolio bids only, have set a mid-December deadline for first round bids, with the portfolio expected to trade early next year.

Expected bidders 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, as well as Apollo Global Management.

In addition, the Qatar Investment Authority is also understood to be interested in Central Park.

NAMA is not offering vendor financing for Central Park as the bad bank believes that the domestic and overseas banking markets will be interested in financing a leveraged buyer.

Bank of Ireland and possibly Allied Irish Bank, as well as investment banks like Deutsche Bank and Goldman Sachs are expected to be among the interested financiers, with pricing expected to be in the mid-to-high 300s over three-month Euribor.

Four-strong Dublin office Platinum Portfolio seeking €120m

The data room for NAMA’s four-strong Dublin City office portfolio, which carries an €120m asking price, was finally opened in the last 24 hours after a two-week delay in finalising ratified legal documents pertaining to the portfolio.

Platinum Portfolio comprises: Bloodstone Building on Sir John Rogerson’s Quay; Block B, Riverside IV on Britain Quay; Grand Mill Quay on Barrow Street and Hume House on Pembroke Road.

Hume House is the notable value-creation play for investors as it offers a reasonably prime location albeit needs considerable capex to modern the asset.

The sale, on behalf of Paul McCann of Grant Thornton and Declan Taite of RSM Farrell Grant Sparks, includes four office blocks all of which are located in prime city centre addresses, spanning the south docklands to Ballsbridge in Dublin 4.

CBRE and Knight Frank have been mandated to sell the 320,000 sq ft Platinum Portfolio, which are now expected to seek first round bids in the next three to four weeks.

Bids are invited individually and as a full portfolio. Similar bidders across Platinum and Central Park are thought likely.

All parties declined to comment.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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