Nama takes control of Dundrum Town Centre

Agency disposes of Northern Irish portfolio

Move  is seen as a first step towards Nama forcing a sale of the centre owned by Joe O’Reilly’s Castlethorn Construction, an associate of Chartered Land. Photograph: Frank Miller

Move is seen as a first step towards Nama forcing a sale of the centre owned by Joe O’Reilly’s Castlethorn Construction, an associate of Chartered Land. Photograph: Frank Miller

Sat, Apr 5, 2014, 01:01

DAN KEENAN


The National Asset Management Agency has taken control of all loans connected with the Dundrum Town Centre by buying out debt held by Ulster Bank and KBC Bank Ireland.

The two banks had 16 per cent and 14 per cent, respectively, of the debt associated with the shopping centre which commercial property sources said was close to €600 million.

Nama announced it has also sold its entire Northern property loan portfolio – known as Project Eagle – to US private investment firm Cerberus Capital Management. The portfolio involved original borrowings of £4.5 billion (€5.44 billion) and were secured by assets throughout the North, Britain and across Europe. The portfolio includes commercial properties, pubs and shops as well as sites.

Nama is believed to have paid face value to acquire Ulster Bank and KBC’s Dundrum loans. Ulster Bank is seeking to work through £9 billion of non-core loans under a strategy drafted by its parent company Royal Bank of Scotland.

This is seen as a first step towards Nama forcing a sale of the centre owned by Joe O’Reilly’s Castlethorn Construction, an associate of Chartered Land. Mr O’Reilly is reported to have had €2.8 billion worth of loans on various property transferred into Nama when it was established in 2009, making him one of the agency’s biggest debtors. The loans relate to both Castlethorn and Chartered Land, which had a number of high-profile developments.

Dundrum Town Centre opened in 2005 and its 150-plus traders have combined annual sales of more than €600 million. The centre covers 1.25 million square feet and has a footfall of 19 million people a year.

It attracted a number of high-end foreign retailers including House of Fraser, Harvey Nichols, Hamleys and Hollister. No comment was available from Ulster Bank or KBC.

Nama’s sale of its entire Northern property loan portfolio was welcomed in both Belfast and Dublin.

Stormont First Minister Peter Robinson said it was “excellent news” and he praised Minister for Finance Michael Noonan for his role in the sale.

Nama chairman Frank Daly said the deal was the “best possible result for the taxpayer” but did not disclose the price paid for the debts in what was the largest single transaction by the bad bank since it was set up to clear development loans from the Republic’s main banks.

Nama is understood to have paid €1.3 billion (£1.1 billion) for a package of loans linked solely to assets and development in Northern Ireland which has formed part of the Project Eagle package.

Mr Robinson said, “For some time I have made clear the danger to the local economy of leaving valuable assets undeveloped.” The sale “is very good news for the Irish taxpayer, Nama and the Northern Irish economy”, said Mr Noonan. “A strong and growing economy in Northern Ireland is in all our best interests.”