NAMA readies €225m Project Drive loan portfolio as Dankse Bank prepares Project Circle

NAMA and Danske Bank are both set to bring their latest Irish real estate portfolios for sale to market over the next two to three weeks, in a loan portfolio and direct asset portfolio respectively by the two deleveraging institutions.

NAMA logoNAMA’s Project Drive is a commercial property loan pool, with an gross unpaid loan balance of €225m, all extended to N1 Property Developments, ran by Irish property developer and auctioneer Brian O’Farrell, in its latest single borrower loan portfolio.

O’Farrell is one of the recently Court-named “Maple 10” – or the “Anglo Golden Circle” – who were allegedly given hundreds of millions in loans by Anglo Irish Bank to reinvest in the bank’s shares and buyout Seán Quinn’s 10% stake.

Last Wednesday, former Anglo Irish executive Sean FitzPatrick, Pat Whelan and William McAteer denied 16 charges in Court 19 of the Courts of Criminal Justice of unlawfully loaning capital to 10 Irish property developers for the purpose of reinvesting in Anglo Irish Bank to prop its declining share price.

The centrepiece attraction of the Project Drive loan portfolio is secured against the Northside Shopping Centre, one of Dublin’s oldest and most established shopping centres just north the city centre.

Ireland’s property crash curtailed ambitious and ultimately overly expensive plans to redevelop the 1970s shopping centre into a new, modern replacement.

Also within the Project Drive loan pool are nearby industrial properties which could be demolished to enable an enlarged Northside shopping centre in the loan portfolio’s major redevelopment opportunity.

Project Drive also includes loan secured by additional industrial properties north of Dublin, a prestigious house a Golf course in County Kildare, the K Club, which was used during the 2006 Ryder Cup. In addition, there are a number of commercial property developments in Poland.

EY, formerly known as Ernst & Young, is handing the sale of Project Drive for NAMA.

Danske Bank readies Project Circle direct residential portfolio

Separately, Danske Bank is bringing to market a portfolio of post-enforcement homes across Ireland in a portfolio dubbed Project Circle, and with an expected asking price of up to €100m.*

Danske Bank logoProject Circle, the sale for which is being managed by Danske Bank’s non-core team directly, is expected to include between 550 and 600 individual homes with the final portfolio size to be clarified within the next week.

An initial teaser document of the assets for sale will be distributed in the first week of March, with first bids scheduled for end of March.

Upon portfolio finalisation, Project Drive is expected to have a 50% to 55% concentration of assets in the Greater Dublin area, with further concentrations in cities including Galway, Limerick and Cork.

The guide price of between €80 and €100m in parts depends on the final portfolio size, and reflects valuation work undertaken by DTZ Sherry FitzGerald, which ran the sale process for Danske Bank’s Project Arc 10-strong property portfolio which traded to Green REIT for €127.6m last October.

Project Circle is expected to gather interest from the winner and underbidder on Lloyds Banking Group’s Project Phoenix, which was Apollo Global Management and York Capital, respectively, as the underlying collateral is similar, albeit Circle is hard assets compared to Phoenix’s loans.

In addition, a wider group of private equity funds, hedge funds and residential property funds are all expected to be interested, including Lone Star, CarVal Investors, Marathon, Hines, Kennedy Wilson, CAPREIT, Patrizia and Hines.

Green REIT, in its interim results yesterday morning, announced it is close to completing the off-market acquisition of five Dublin city centre properties – known as the D2 Portfolio – from Danske Bank Ireland for €23m, including costs.

The D2 Portfolio comprises five properties with c. 69,000 sq. ft. in two locations, Molesworth Street and Ormond Quay. The properties are leased at relatively low rents providing the opportunity for rental growth with some of the existing leases due to expire between 2014 and 2016.

Danske Bank’s non-core Irish commercial property loans are managed by Pepper Asset Services.

All parties declined to comment.

* Correction: this article previously stated up to €800m. This was a typo error. Apologies.

About CoStar News

Finance Editor, CoStar News
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