Distressed portfolio could go for €140m

Green REIT, Ireland’s first property investment trust, remains favourite to buy a distressed property portfolio being sold by Danske Bank and expected to make between €135 million and €140 million when tenders close on Friday next.

Green is known to be anxious to acquire its first block of properties since raising €310 million in a share placement helped by the ongoing recovery in the property market.

Selling agent DTZ Sherry FitzGerald has had to whittle down an estimated 160 offers for the Project Arc portfolio to just 15 for the final round of bidding. Several of the companies, including Apollo, are pitching for the full range of properties but the majority are only interested in buying either individual properties or part of the portfolio.

These include retail parks in Tallaght, Dublin 24, Naas, Co Kildare and Limerick city. With most buyers in the market looking for modern office investments in Dublin city, it is hardly surprising that most interest has centred on Fitzwilliam Hall, a modern Georgian-style building overlooking the Grand Canal at Leeson Street Bridge in Dublin 2. The serviced office centre has 60 office workplaces and is producing a rent roll of €800,000 per annum.

Ulysses portfolio
Meanwhile Jones Lang LaSalle also had a strong level of bids this week for the Ulysses portfolio being sold on the instructions of Bank of Scotland Ireland. All but one of the assets belonged to developer Liam Carroll and included shopping centres in Dun Laoghaire and Clondalkin and office buildings in the north docklands.

Jones Lang LaSalle had been quoting €140 million for the 25 properties which are producing an overall rental income of €13.94 million.

Interest from overseas
With turnover in the commercial property investment market already in excess of €1 billion, and likely to come close to as much as €1.5 billion by year end, selling agents are reporting a marked increase in the number of overseas property companies chasing distressed portfolios and a similar uptick in the number of wealthy Irish and overseas individuals pitching for standalone investments that have been coming onto the market.

Fergus O’Farrell of Savills said Ireland’s appeal as an investment location for domestic and international “core and opportunity investors” continues to improve on the back of improving economic data and the impending exit from the bailout programme at the end of this year.

James Nugent of Lisney noted that the capital value index for offices has recorded its first quarterly rise – up one per cent – since September, 2007, reflecting the fact that there is strong interest in this asset class.


Surprise disclosure
Bidders for Project Arc portfolio revealed in email
Companies involved in bidding for the Project Arc property portfolio currently being sold on behalf of Danske Bank were surprised last week to receive the names of virtually all the other bidders in an email from solicitors Matheson.

The email was sent to all 15 bidders, including two estate agents, notifying them of an amendment to one of the documents relating to the sale.

The correspondence was cc’ed with the result that the email addresses of all 15 second round bidders could be seen by all of the recipients. The list included Jones Lang LaSalle who are known to be bidding for Green REIT, and HT Meagher O’Reilly.

The purpose of the email was to point out an amendment to data related to one of the properties, Classon House.

It told the recipients that the revised data was available as a result of “the disclosure of certain other letting documentation”.

One of the recipients told The Irish Times: “This was very unusual to have the names of all the bidders disclosed to each other. It could be a game changer and I am reconsidering my position.”

Asked whether it was standard practice to notify bidders qualifying for the second round of the identify of others also entitled to make further bids, a spokesman for Matheson said: “We have a legal and professional duty not to comment on client matters.”

The parties cc'd in the email were Apollo; Jacqueline Fitzpatrick of Jones Lang LaSalle who is bidding for Green REIT; Adrian Truick of HT Meagher O'Reilly; Pears Global; Brehon Capital; Starwood; Davy; Patron Capital; IPUT; Crownway ; O'Flynn Group; Kimptonvale; Genesis Homes; Stargime and Valpar.

Final bids are due to be lodged by 5pm on Friday next.