Sunday 23 November 2014

Ex-Nama exec targets Dunne's former assets

Top executive who once managed portfolio belonging to 'Baron of Ballsbridge' now fronts property investment fund

RONALD QUINLAN Special Correspondent

Published 05/01/2014 | 02:30

Sean Dunne, pictured on New York’s Park Avenue. Photo: Neville Elder
Sean Dunne, pictured on New York’s Park Avenue. Photo: Neville Elder

A FORMER senior Nama executive who had direct responsibility for managing Sean Dunne's business with the agency has revealed that he is now considering buying up the assets of the one-time 'Baron of Ballsbridge' and other Nama developers.

Kevin Nowlan said his property investment fund Hibernia REIT (Real Estate Investment Trust) had already been looking at buildings which had been owned by Mr Dunne in Ballsbridge and Dublin's docklands, as well as a loan book with a face value of €300m built up by developer Sean Reilly, which comprises prime office blocks in Dublin 2 and Dublin 4.

However, the former Nama portfolio manager insisted his previous employment with the State's 'bad bank' did not give him a competitive advantage.

"There are no restrictions on me [on bidding for Nama assets]. Nama competitively tenders everything, so I am at no advantage," Mr Nowlan told Property Week magazine in the UK, in an interview published in its December 20 edition.

Mr Nowlan said the Hibernia REIT fund had already identified a number of other assets for which it intends to bid both on and off market in the coming months.

"We would like to do a deal in the first quarter [of 2014], but only if it is the right one," he said.

Mr Nowlan's stated interest in acquiring properties developed by Mr Dunne and other Nama debtors may further fuel concerns already being expressed in political circles in relation to the ongoing exodus of key officials from Nama.

Asked by the Sunday Independent to comment on Hibernia REIT's intentions or otherwise in relation to Mr Dunne's former assets and those of other Nama developers, a spokesman for the fund said: "We will not speculate or comment on what we might or might not bid for."

Prior to his departure from Nama last January, Mr Nowlan had played a central role in the decision-making process in relation to Mr Dunne's portfolio.

In November 2010, for instance, he headed up the Nama team which recommended to the agency's credit committee that Mr Dunne's business plan be rejected.

Chief among the reasons cited by Mr Nowlan and his fellow portfolio managers for rejecting Mr Dunne's proposals on that occasion was his requirement for some €275m in additional funding to build out his various assets in preparation for their disposal.

Commenting on this, the presentation to Nama's credit committee noted that it was "not sustainable due to current and projected over supply in the Dublin [office] market".

While Nama continued to work with Mr Dunne on a consensual basis for some months afterwards, it moved against him in July 2011 with the appointment of receivers to a number of his properties, including Hume House in Ballsbridge.

It would certainly be ironic were Hume House to end up being owned by the investment fund Mr Nowlan established in conjunction with the US-based Irish property investor, Frank Kenny, following his departure from Nama.

Acquired by Mr Dunne in 2006 for an eye-watering €130m, the ageing Dublin 4 office block is just one of four properties in Nama's Project Platinum, and for which Mr Nowlan said Hibernia REIT would consider bidding for.

Also for sale as part of this process are the Bloodstone building and Block B of the Riverside IV building in Dublin's docklands (both of which were developed and owned by Mr Dunne) and Grand Mill Quay -- an office block developed by Bernard McNamara on nearby Barrow Street.

Taken together, the four properties in 'Platinum' are expected to raise some €120m for Nama -- a mere fraction of the amount they would have been expected to achieve at the height of the boom.

In its end-of-year statement last Friday, Nama confirmed that it was now in the process of considering final-round bids for 'Platinum' and said the sale would close shortly.

Asked by the Sunday Independent if the Hibernia REIT had made a bid for the Platinum portfolio, a spokes-man for the fund declined to comment.

A spokesman for Nama also declined to comment.

The decision to launch the Hibernia REIT fund came in August of last year after months of discussion between Mr Kenny and Mr Nowlan's father, Bill. Following a round of investor presentations in Dublin, London, Boston and New York, Hibernia REIT raised €365m through its IPO (initial public offering) on the Irish Stock Exchange last month.

Irish Independent

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