Green REIT has confirmed it has exchanged contracts to acquire Central Park for €311.5m in a joint 50:50 venture with PIMCO, sparking a €150m senior financing mandate on the six-strong office complex next month.
PIMCO is to provide a circa bridge loan to enable The Central Park Limited Partnership, the joint venture partner company, to close the acquisition from receivers appointed NAMA and Devano Developments in March.
Last Friday, HSBC Alternative Investments Limited (HAIL) and Hines completed the purchase of Aviva Investors’ 72.8% stake in Dublin’s Liffey Valley shopping centre for €253m, financed with a five-year €140m senior loan from Bank of Ireland (BoI).
This senior facility is a noteworthy comparable for The Central Park Limited Partnership. While HAIL and Hines’ Liffey Valley senior loan was at 55% LTV over five-years, Green REIT and PIMCO are seeking 65% – based on a €150m ticket on a €229.5m purchase price for the investment and development land component of Central Park.
CoStar News understands that BoI’s Liffey Valley margin was around 375 basis points on a senior loan LTV at 10 percentage points lower.
Last July, BoI closed a 65% LTV senior loan in the €199m acquisition finance on Kennedy Wilson’s purchase of the 14-strong Castle Market Dublin office portfolio out of receivership from the defaulted Opera Finance CMBS loan.
Allied Irish Bank is also gearing up to lend to the domestic Irish commercial property market, while a raft of international lenders are increasingly comfortable again with the Irish market.
Green Property REIT Ventures Limited will act as investment manager for the joint venture.
Kennedy Wilson is acquiring the remaining residential component of Central Park for around €82m in an undisclosed mix of equity and debt capital.
The commercial property portfolio in Central Park comprises six prime, modern buildings covering approximately 691,000 sq ft in Leopardstown, South Dublin. The portfolio currently generates €14.45m per annum of passing rent, rising to €15.46m per annum once rent-free periods expire.
The commercial property portfolio has 87% occupancy and main tenants include Vodafone, Merrill Lynch, Ulster Bank, Tullow Oil, Leaseplan and Salesforce. Discussions are underway with a number of tenants on the vacant space.
There is a further 7.5 acres of development land with various planning permissions for approximately a further 700,000 sq ft of development.
Gary Kennedy, chairman of Green REIT, said in a statement: “We are very pleased to announce the acquisition of Central Park, Dublin’s most prestigious Business Park, along with our partners.
“The acquisition of Central Park represents further progress towards our stated objective to assemble a portfolio of commercial property assets which require active asset management and deliver targeted shareholder returns. Our total invested capital following this transaction will exceed €334m.”