Monday 22 December 2014

NAMA getting €40m more than it sought for three malls

Peter Flanagan Commercial Property Editor

Published 26/07/2014 | 02:30

Millfield Shopping Centre
Millfield Shopping Centre

THREE shopping centres have been sold for tens of millions of euro more than expected.

US investment firm Varde is believed to have agreed terms to buy Blackpool Shopping Centre in Cork, the Showgrounds in Clonmel, Co Tipperary, and Millfield Shopping Centre in Balbriggan, north Dublin (right), for a combined total of €170m.

The centres were put on the market last April by NAMA under Project Acorn.

It is the first set of shopping centres NAMA has sold. The State's bad bank had appointed Stephen Tennant, of Grant Thornton, to oversee the sale process.

The final sale price is far higher than had been expected. When the centres hit the market initially, they did so with a guide price of €130m.

Blackpool Shopping Centre, which was originally funded by Bank of Ireland, had been valued at around €75m.

Millfield Shopping Centre, inset, which was only completed in 2011, was considered likely to sell for less than the €50m it cost to develop it.

Anglo Irish Bank contributed most of the funding for its development.

Anglo also helped fund the Showgrounds, which opened in 2009. It is thought to have been valued at less than half the €40m it cost to develop.

The deal is a big win for Varde Partners, a low-key investment firm headquartered in Minnesota, far away from Wall Street. It specialises in "alternative" investments and is known as a buyer of distressed assets, including property.

Varde is believed to have beaten off a host of competitors for the shopping centres.

Project Acorn is considered a key portfolio as it is the first deal involving regional shopping centres since the crisis first hit.

There is a glut of provincial shopping centres being prepared for the market at present, with Ulster Bank expected to start shifting its assets any day now.

As a result, the sale price for these three centres will only encourage more movement in the market.

It is also one of the first times a big overseas investor has bought commercial property outside Dublin.

Up to now nearly all the major deals have been done in the capital.

Irish Independent

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