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Bank of Ireland investors set for €500m spree

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BANK of Ireland (BoI) investors Kennedy Wilson and Fairfax Financial are gearing up to spend "at least" €500m on Irish commercial property over the next 18 months.

Kennedy Wilson boss William McMorrow confirmed the scale of the companies' imminent investment, and said their first property deal should be agreed "by the middle of the year".

The money will be invested through a European property partnership unveiled by Kennedy Wilson and Canadian insurance giant Fairfax Financial earlier this week.

Mr McMorrow said the venture was being set up with €278m of equity and would have €1bn to spend once debt finance was factored in.

Under the terms of the European partnership, Kennedy Wilson will "play the lead role in sourcing, negotiating and executing" deals, while Fairfax will "review and approve all opportunities. "I've made it clear that I've got a conviction that now is the time to start buying hard assets in Dublin, that's where some of the dough will be going," Mr McMorrow told the Irish Independent.

"My guess would be at least half of it (will be spent in Ireland)."

Beverley Hills-based Kennedy Wilson made its first foray into the European market by buying Bank of Ireland's real estate management arm in June 2010.

Mr McMorrow and Fairfax's boss Prem Wasra later put together a group of five strategic investors to invest more than €1.1bn for a 30pc stake in BoI last summer.

Kennedy Wilson now has a London office and its top executives have travelled to Dublin several times in the last year to eye up potential investments.

"We're always actively looking at things in Ireland, we have a very big pipeline," Mr McMorrow said. "Some things will take a while, but by the middle of the year we'll have a deal."

Mr McMorrow said the first investment was likely to be an "income property" in Dublin. The target size of individual investments is "€40m and up".

He declined to be drawn on whether the first deal would be done with the National Asset Management Agency or with one of the commercial banks, saying only "we're talking to everybody".

The mandate of the European venture allows it to invest in "commercial real estate assets, including loans and real property".

The planned investment in Ireland comes after Finance Minister Michael Noonan recently said that NAMA might sell as little as €2.4bn of assets between 2012 and 2013 -- against €6.6bn sold by the end of last year.

Other banks, most notably Ulster Bank and Irish Bank Resolution Corporation (formerly Anglo), are known to be actively pursuing sales of both loans and property assets that they have already taken over.

Kennedy Wilson and Fairfax Financial have seen the value of their BoI shares rise by more than 30pc since their original investment -- but the quintet are prohibited from selling out until mid-2014.

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