Friday 15 December 2017

Goldman Sachs to 'flip' Docklands block in €130m deal

Private equity unit to make quick profit on Spencer Dock sale

Goldman Sachs' private equity division is set to turn a quick profit by
Goldman Sachs' private equity division is set to turn a quick profit by "flipping" property in Dublin's Docklands
Nick Webb

Nick Webb

Goldman Sachs' private equity division is set to turn a quick profit by "flipping" property in Dublin's Docklands just over a year after buying it from the IBRC.

Goldman Sachs is selling the Spencer Dock Block R office building which it bought as part of the 'Project Stone' portfolio offloaded by IBRC in April 2014. The investment bank is selling its stake in the building which is also owned by Hines and Nama, sources told the Sunday Independent. The assets are likely to sell for €130m with first round bids due this month.

Goldman Sachs' private equity unit bought part of the €9.3bn Project Stone portfolio which was sold by IBRC special liquidators KPMG last year. Lone Star bought around 85pc of the loan book, as part of the €22bn in loans sold during the accelerated wind-down of the former Anglo Irish Bank.

Goldman Sachs bought around €52m worth of debt on the building for an undisclosed discount. This represented about 60pc of the loans against the building. Hines holds an interest in the building as part of its purchase of broader Treasury Holdings assets in the Spencer Dock area.

The investors are set to bank major profits on the loan deal, as the value of the building has risen sharply as it is now fully let, with tenants including the Central Bank, the Commissioners of Public Works and Nationwide Building Society. It was only half-let in April 2014 when the consortium took control of the building.

A shortage of commercial property and offices in Dublin city centre has also driven up asset prices and rents.

It is one of a number of high-profile IFSC office blocks that have come up for sale in recent months. Last week Irish Life paid €33m for an office at George's Dock, which had been owned by a consortium put together by Derek Quinlan during the boom.

CBRE and Savills are jointly selling the building. Fergus O'Farrell of Savills said: "Given the high-profile location, security of long-term income from State bodies in conjunction with continued investor appetite for Grade-A office buildings, we anticipate a strong level of interest in the property."

CBRE's Colm Luddy added: "The quality of the development will mean that Block R will appeal to international and Irish institutional investors. This opportunity is well positioned to benefit from rental growth in the office market.

CoStar has suggested that potential buyers could include German and Irish institutional buyers including Irish Life, I-PUT, Union Investments, GLL Real Estate Partners and Deka Immobilien Investment.

Goldman Sachs' planned sale of its Dockland's office block is the latest in a series of high-profile sales of prime real estate assets by overseas institutional players. Private equity groups and specialist real estate buyers have made significant profits on commercial property assets bought in the downturn.

Siegmut Boehm manages German family fortunes as head of AM Alpha Gmbh in Munich. He recently sold a large Dublin office block bought in 2012 for almost €40m - making an €11m profit in just three years. US investor Starwood recently pipped a fund tied to Chinese insurer Ping An to buy a €350m office block portfolio from distressed asset specialist Lone Star, which had bought the assets in 2012.

In January, London property fund Quadrant Estate sold the Cineworld Complex on Dublin's Parnell Street to Friends First for €33.8m. The investor had bought the property for €22m eight months earlier, netting a near €12m profit on the deal.

Sunday Indo Business

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