Thursday 21 June 2018

Oaktree seals €250m deal for Square shopping centre in Tallaght

US private equity giant Oaktree has completed its acquisition of the Square shopping centre in Tallaght
US private equity giant Oaktree has completed its acquisition of the Square shopping centre in Tallaght
Ronald Quinlan

Ronald Quinlan

US private equity giant Oaktree has completed its acquisition of the Square shopping centre in Tallaght.

At €250m, the deal represents one of the largest retail transactions to have taken place in Ireland and is likely to be Nama's final disposal of a major single asset. The sale also represents the last of the five major M50 retail schemes to have changed hands since the crash.

The amount paid by Oaktree is significant, and some €17m above the €233m quoted by joint agents JLL and Cushman & Wakefield when they brought the Square to the market last autumn.

But it is still a long way off the near €640m valuation the scheme carried in 2007 when financier Derek Quinlan's Quinlan Private sold a stake of around 51pc to developer Noel Smyth for €320m - or some €70m more than the sum for which a "controlling interest" of over 90pc of the Square's shops were sold yesterday.

Oaktree's acquisition gives it control of 118 of the Square's 160 shop units, a cinema with 13 digital screens and more than 2,400 car spaces.

The centre is anchored by Dunnes Stores, Tesco and Debenhams. Extending to 53,603 sq m (577,500sq ft) the Square is located on a site of 27 acres. Hugely popular with shoppers, the scheme registered 22 million visitors in 2016 alone and is currently producing annual rental income of almost €14m. Oaktree's purchase of the Square was part-financed by AIB Real Estate Finance.

Colin Hunt, Managing Director of AIB Wholesale, Institutional & Corporate Banking said: 'We are very pleased to support funds managed by Oaktree through funding the purchase of one of Dublin's largest shopping centres.

"This collaborative funding provides an opportunity to further enhance and develop a well-established shopping location in Ireland. It also demonstrates AIB's commitment to deploying our capital to support the Irish economy."

Marcus Wren, Co-founder of Sigma Retail Partners who are retail asset advisers to Oaktree's European Principal Group said: "The Square Town Centre has remained in fractured ownership since its opening in 1990 and as a consequence it had not been possible, until relatively recently, to meaningfully adjust or manage the centre to reflect the needs and wants of today's shopper."

Prior to offering the Square for sale, Nama acquired and amalgamated various borrower's interests in the scheme, putting it in a position to sell over 90pc of the its units and 100pc of its redevelopment potential.

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