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Wednesday 25 April 2018

NAMA takes control of €1bn shopping centre

Dundrum Town Centre performed better than most during the recession
Dundrum Town Centre performed better than most during the recession
Donal O'Donovan

Donal O'Donovan

NAMA has struck a deal copper-fastening its control over the future of the Dundrum Town Centre – including the ultimate say over whether or not to sell the mall.

The south Co Dublin shopping centre is reckoned to be worth as much as €1bn after weathering the economic crash.

In another sign of a speed-up in activity in the agency, NAMA yesterday announced a €1.6bn sale of its portfolio of Northern Ireland linked property loans to US investors Cerberus Capital Management, chaired by former US vice president Dan Quayle.

At 150,000 square-metres, the Dundrum Town Centre rivals Dublin city centre as a retail hub. Despite the economic downturn it rarely sees a vacant unit and tenants range from luxury retailers like Harvey Nichols and BT2, to Tesco, HMV and Penneys.

The vast shopping centre also features a cinema, theatre and restaurants.

State-owned NAMA is the biggest lender to Castlethorn, the company behind the Dundrum Town Centre, which is owned by developer Joe O'Reilly.

NAMA already held 70pc of the debts backing the centre, which it "inherited" from Anglo Irish Bank and AIB. The agency has now bought up the 16pc of debt originally owed to Ulster Bank and the 14pc owed by KBC, to take total control over the loan package.

NAMA paid full face value for the loans.

"This appears to be a sensible move by NAMA as it gives the agency control of loans linked to what is the jewel in the crown of Irish retail," said Philip O'Sullivan, an economist at Investec in Dublin.

The timing of the Dundrum deal reflects fears within NAMA that Ulster Bank or KBC could have looked to sell their stake in the debt to third party investors such as US hedge funds who could have potentially complicated decision-making over the future of the centre.

Ulster Bank this year said it would sell off €10.9bn of its Irish "non-core" loan assets, increasing the chances of the Dundrum loans changing hands.

But the focus of market speculation is that Dundrum is being prepared for sale by NAMA, something that can be executed more quickly and potentially more discretely with a single lender.

It would fit into a pattern established since the start of the year of NAMA dramatically ramped up its disposals.

Yesterday's sale of loans linked to Northern Ireland-based developers is the biggest yet by the agency and billions of euro more of assets are currently on the market. First Minister Peter Robinson welcomed the deal.

Irish Independent

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