Friday 20 January 2017

Investment funds to swoop as Nama sells off residential loans

Published 16/03/2016 | 02:30

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Thousands of homes will be included in a massive Nama sell-off of property loans worth nearly €5bn.

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A host of international funds are set to bid on two portfolios of loans being sold by Nama which have a face value of €4.7bn.

The residential properties in the mammoth sale are understood to include apartment blocks, mostly located around Dublin.

It comes amid allegations that tenants have been forced out of their housing estate in Dublin following an overseas investor buying loans tied to their homes.

Nama is mandated by law to attain the best price available for its assets. Up to now, big US investment funds have been the buyers with the deepest pockets and will again be expected to buy these new loans.

But while the loans have a par value of €4.7bn, they will be sold for significantly less than that.

Nama formally kicked off the sale process of the portfolios yesterday, only days after tenants in Tyrellstown, west Dublin, were informed their leases would not be renewed.

The loans tied to the properties in Tyrellstown have been bought by a company controlled by the US investment bank Goldman Sachs.

Goldman Sachs is not believed to have played any role in the Tyrellstown controversy, and those loans were not sold by Nama.

But the row in Tyrellstown comes at the worst possible time for Nama, as it seeks to complete one of its biggest loan sales to date.

Project Ruby and Project Emerald, as the portfolios are known, contain loans tied to apartments, as well as commercial property, development land and hotels.

Project Emerald is made up of loans with a par value of €2.5bn from 16 borrowers. Those loans are secured against 236 properties.

While most of the loans in Project Emerald are related to commercial property, more than a fifth of the underlying properties are residential.

By value, just over a fifth of the properties are in Dublin, while about half are in the rest of Ireland. The remainder are located in Europe.

Project Ruby, meanwhile, involves loans that have a face value of €2.2bn tied to 15 borrowers. The debts are secured against 253 properties.

Just over 11pc of the portfolio is residential, with the vast majority of the portfolio being made up of commercial properties. More than 97pc of the properties are in Ireland.

Crisis

The portfolios will attract the interest of numerous international players, mostly from the US. The likes of Goldman Sachs, Blackstone, Kennedy Wilson, and others have been among the biggest buyers of Irish property since the financial crisis.

Many of them bought property and loans at the bottom of the market and are sitting on profits of tens of millions of euro. Cushman and Wakefield is managing the sale.

Nama is quickly selling off its remaining assets.

Specialist bank Investec has said it believes that Nama's forecast of €2bn surplus is "conservative" and said it will likely exceed €3bn.

Nama has said it will meet its target of redeeming 80pc of its senior debt nine months ahead of target.

Irish Independent

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