Sunday 24 September 2017

Anger over 'late rule change' in €503m Dublin land deal

Ulster Bank's headquarters in Dublin
Ulster Bank's headquarters in Dublin
Maeve Sheehan

Maeve Sheehan

Several failed bidders for Ulster Bank's €503m Project Clear portfolio are understood to be unhappy with the sales process that concluded last week with Cairn Homes and US investment firm Lone Star winning access to a massive residential land bank in Dublin.

The dissatisfaction of some rival bidders is understood to centre on a late change in the rules that enabled Cairn Homes join forces with Lone Star after the bidding process had already started, according to market sources.

Cairn Homes reached the final round of bidding. Lone Star, which had put in an early bid, was not thought to be in the final shake-up. However, rumours that the US investor had joined forces with Cairn at a late stage in the process were confirmed last week with the announcement that the two jointly secured the loans with their bid of €503m.

Other bidders included the Cork developer Michael O'Flynn, backed by the New York-based Avenue Capital Group and who also reached the final round; Bartra Capital, the property firm set up by former Treasury co-owner Richard Barrett; Cerberus, the US investment fund which acquired Nama's Project Arrow; Hines, a US firm that has invested heavily in developing Cherrywood in South Dublin; and Joe O'Reilly's Castlethorn Construction and a number of private equity firms.

Ulster Bank declined to comment on the sales process yesterday. Under the deal, Cairn Homes will pay €378m and Lone Star pay the remaining €125m for the loan portfolio. Last week, Cairn chief executive Michael Stanley said the transaction will "unlock the most significant land bank available in Ireland".

Sunday Independent

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