NAMA’s Project Jewel loan portfolio, including the bad bank’s marquee Irish asset the 1.3m sq ft Dundrum Town Centre, will be launched in just over two weeks with a completed data room scheduled for the third week of June.
Eastdil Secured has been enlisted to sell Project Jewel, which is comprised of loans extended to Joe O’Reilly’s Chartered Land, includes:
- the 1.3m sq ft Dundrum Town Centre, Ireland’s largest shopping centre, which has a value between €1.0bn and €1.1bn;
- a 50% stake in the Pavilions shopping centre in Swords, Irish Life and I-PUT each own a 25% stake;
- a 50% stake in the Ilac shopping centre in Dublin city centre, Irish Life owns the remaining 50% stake;
- a land site near Ilac shopping centre in central Dublin, which prior to the crash was earmarked for a large scale retail scheme anchored by John Lewis;
- a land site adjacent to Dundrum, which previously was slated as Dundrum shopping centre Phase II. The existing planning permission may need to be re-secured if the eventual winner sees value in a residential component to any future scheme.
The sale price for Project Jewel is expected to reach between €1.6bn and €1.7bn, with Dundrum reflecting up to two-thirds of the loan portfolio’s real estate value.
Project Jewel is expected to draw investor domestic and global interest, with consortiums expected to form to pitch for the loan portfolio’s component parts.
Investor interest is expected from sovereign wealth funds, such as ADIA and Qatar Investment Authority, global private equity firms, including an expected bid by Blackstone, specialist global retail REITs, including Simon Property Group and possibly even Starwood’s mortgage REIT following its widened mandate to include equity investments, as well as developers, such as Hines.
Project Jewel has an aggregate annual income of circa €70m.
Originally, NAMA only owned €538m of the €775m unpaid senior debt secured by Dundrum and took to the atypical – but innovative – step to acquire the loans against the giant shopping centre which it did not own last April.
NAMA acquired Ulster Bank’s €129m syndicated loan at par value, which was part of the RBS subsidiaries’ €844m Project Button loan portfolio, as well as a €108m syndicated loan from KBC Bank Ireland, also at par.
The marriage value in uniting the previously disparate Dundrum senior debt is expected to be considerable for NAMA.
One of the considerations for the sale of Project Jewel is that the two smaller shopping centres – the Pavilions shopping centre in Swords and the Ilac shopping centre in Dublin city centre – includes pre-emption rights for the co-owners.
The pre-emption rights, a first right to buy option, can be side-stepped through selling the loans secured by the assets, and this is understood to have been a key consideration in NAMA’s decision to opt for a loan rather than direct asset sale. The loan sale strategy was reported back in January.
NAMA and Eastdil Secured declined to comment.