Friday 19 January 2018

Battle lines drawn as overseas players face off for Dundrum

The Dundrum Town Centre which is attracting overseas buyers
The Dundrum Town Centre which is attracting overseas buyers
Peter Flanagan

Peter Flanagan

A host of international investors are set to face off for Dundrum Town Centre in one of the highest profile property sales since the crash.

Nama is selling loans tied to Dundrum Town Centre and a number of other shopping centres in a portfolio known as Project Jewel.

The portfolio, which is expected to sell for upwards of €1.6bn, has attracted bids from the US, Europe and the Middle East.

Germany's Allianz Real Estate has submitted a bid with UK property investment giant Hammerson. US investor Hines has bid with the Kuwait Investment Authority, while the other bidder is another US firm Colony Capital.

Colony has worked extensively with developers Johnny Ronan and Patrick McKillen in the UK and here.

As well as the Dundrum Town Centre loans, Project Jewel includes a 50pc stake in the Pavilions Shopping Centre in Swords, a 50pc stake in the Ilac Centre in central Dublin, a land site near the Ilac Centre and another site adjacent to Dundrum Town Centre which had been earmarked for the second phase of the shopping centre.

It is expected that the preferred bidder will look to work with Joe O'Reilly's Chartered Land, which developed Dundrum Town Centre during the Celtic Tiger.

Another US firm, Davidson Kempner, has withdrawn from the bidding.

The sale process is expected to be concluded relatively quickly, with a preferred bidder likely to be named in the coming weeks. Nama is selling the loans secured against the shopping centres rather than the centres themselves, but the loans will give whoever buys them effective control over the property.

In practice, the buyer will likely have the last word on any plans put forward by Chartered Land, which still runs the properties.

Allianz has bid on a number of properties in Dublin in recent months. Hines, meanwhile, is in the process of building an enormous town centre-style development at Cherrywood in south Dublin.

The Kuwait Investment Authority - the investment fund of the Kuwait government - arguably has the deepest pockets out off all the potential bidders. The authority is reported to control assets worth as much as $300bn.

Perhaps the most intriguing bidder, however, is Colony Capital. The US fund has backed Belfast developer Mr McKillen in the UK and has helped him retain control of three hotels in central London including the five-star Claridges Hotel. It is also backing Mr McKillen and Mr Ronan in the construction of a new office block at Burlington Road in Dublin 4.

Hammerson, meanwhile, is one of the biggest property firms in the UK but has shown little interest in Ireland in the current market.

A deal for the Dundrum loans will see one of the icons of the Celtic Tiger fall into foreign ownership. The centre was developed by Chartered Land in 2006 and quickly became the pre-eminent shopping centre in the country. It is valued at €1.1bn on its own.

While Mr O'Reilly did not bid for the Project Jewel loans, he has been active in the market.

In July, his Chartered Land firm forked out more than €155m with the backing of the Abu Dhabi Investment Authority for the former Jurys and Berkeley Court Hotels in Ballsbridge.

Irish Independent

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