Sunday 4 December 2016

Nama appointing Eastdil to handle sale of €1.5bn Project Tolka loan book

Published 03/11/2016 | 02:30

Valued in the region of €250m, Burlington Plaza is one of Project Tolka’s most significant assets
Valued in the region of €250m, Burlington Plaza is one of Project Tolka’s most significant assets

Nama is expected to announce the appointment, possibly as early as today, of Eastdil Secured, a subsidiary of the Wells Fargo Bank, to manage the sale of the €1.5bn par value Project Tolka loan portfolio .

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The Irish Independent understands officials at the State agency concluded an agreement last night with Project Tolka's main borrowers with a view to putting the loan book on the market immediately. A source familiar with the matter said timing was now of the essence as Nama is “determined” to dispose of Project Tolka by Christmas.

The finalisation of the agreement between Nama and the borrowers had been delayed earlier this year as efforts were made to perfect the title on a number of assets within the portfolio, with a view to maximising its potential sale price. As the Irish Independent has reported previously, Nama is hopeful of securing a price "approaching par" for Project Tolka and as such, had been pressing for several months for as much as possible of the loan book's title documentation to be perfected in order to achieve that aim.

The Project Tolka sale had already been postponed in the summer of 2015. Nama pulled the sale as one of the portfolio's major borrowers, the developer John Flynn, was in talks at the time to refinance his loans with the agency.

While the loans in Project Tolka are in the main accounted for by a partnership comprising Flynn and his longstanding business partner, developer Paddy Kelly, and the Dublin-based McCormack family, who control the property investment vehicle Alanis, it is understood there were in excess of 150 'obligors' or other minor investors, whose signatures Nama had sought in order to assert title on certain assets within the portfolio.

Among the portfolio's most significant assets is the Burlington Plaza office complex on Dublin's Burlington Road. With an estimated value of €250m, it is occupied by several high-profile tenants including Sky Ireland, Amazon and Bank of Ireland. Other valuable assets within Project Tolka include the Clarion Hotel in Dublin's Liffey Valley, the Belfield headquarters of betting giants Paddy Power, and the former Harcourt Street children's hospital which is occupied by Dublin law firm BCM Hanby Wallace.

It is understood the four-star Carton House Hotel developed by Paddy Kelly is to be sold separately from the wider portfolio.

Nama's aim of delivering on its target of building 20,000 new homes by 2020 has seen it strip out a number of major residential assets from Project Tolka. Included in these are a 68-acre site in Bray, Co. Wicklow, and lands at Carrickmines in south Dublin. The agency has also secured a 10-acre site in Bray for the development of two new schools.

Nama's housing plan, however, could yet be frustrated should the European Commission find in favour of a complaint submitted last December by property developers Michael O'Flynn, Paddy McKillen, David Daly, Patrick Crean and MKN Group director Brian McKeown. They have sought an investigation into Nama's provision of funding for property development, alleging that it may breach rules on State aid.

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