Saturday 25 March 2017

Deutsche Bank backs US firm's Cornerstone deal

A stake in MacDonagh Junction in Co Killkenny was one of six shopping centres in the Cornerstone Portfolio.
A stake in MacDonagh Junction in Co Killkenny was one of six shopping centres in the Cornerstone Portfolio.
Peter Flanagan

Peter Flanagan

Deutsche Bank financed the €118m purchase of six provincial shopping centres by a US fund, in a sign of just how attractive Irish commercial remains to international investment.

American investors Davidson-Kempner completed a €118m deal to buy the Cornerstone Portfolio of shopping centres on Friday.

The deal sees Davidson Kempner take control of the Athlone Towncentre, a stake in MacDonagh Junction in Kilkenny, Gorey Shopping Centre in Wexford; Tipp Town Centre in Tipperary; Westside Shopping Centre in Galway and Orwell Shopping Centre in Templeogue, Dublin.

The portfolio also included 150 apartments beside the Athlone retail complex.

JLL ran the sale process.

Financing for the deal is understood to have been provided by tghe German giant Deutsche Bank.

The German giant has been very active in Ireland in recent weeks and is understood to have backed a number of property deals around Dublin in particular. It is not the only big international lender at work in the Irish market at present.

A division of the US investment fund Starwood Capital provided its first loan into the Irish market in July. While that deal was relatively small at just over €6m, it is expected to make more financing available as it believes appropriate.

The Cornerstone Portfolio went on the market on the instructions of Paul McCann and Stephen Tennant of Grant Thornton who had been appointed as receivers at the behest of AIB.

The portfolio is producing an income of $8.8m. The would equate to a net initial yield of just over 7.4pc.

This is the latest deal for shopping centres in Ireland. Last year the US firm Varde paid an estimated €170m for the Acorn Portfolio of three regional shopping centres.

Davidson Kempner had been the underbidder on that portfolio.

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