Danske starts €95m residential buy-to-let Project Circle sale

Danske Bank has kicked off the sale process for an estimated €95 million portfolio of residential buy-to-let assets, according to a source close to the decision.

The bank, which is winding down its Irish operations, will today distribute the information memorandum to prospective bidders for the property portfolio, known as Project Circle.

The portfolio comprises about 680 houses and apartments, mostly located across Dublin, that it has repossessed from a large number of smaller buy-to-let investors. It also includes some properties in major urban areas outside of Dublin city.

The assets are all under the control of receivers from the accountancy firms Grant Thornton, PricewaterHouse Coopers and McStay Luby, with each of the firms responsible for different chunks of the portfolio.

The receivers acting for the bank are not selling the loans behind the assets, as has been the case for several large portfolios sold recently. Rather, it is the actual “hard assets” pledged as security for the loans that are on the market.

Project Circle also includes a 12-acre development site on the Bray Road in Cabinteely, which the bank seized from Durkan New Homes.

The south Dublin site is zoned for residential use, and was originally intended as the location for about 60 new houses. It is located in a part of the city’s suburbs where there is currently a high demand for family homes. There are about a dozen houses located on part of the site, which are also included in the sale.

Project Circle also includes a number of small apartment blocks in their entirety, although it is understood that these multi-unit developments are not large in scale.

The initial assessments the bank has obtained for the portfolio value it at between €90 million and €85 million. A source said a number of prospective buyers had already informally registered their interest in Project Circle.

Prospective bidders who agree to sign non-disclosure agreements will be given access to a ‘data room’ with detailed information on the assets for sale. It is expected the sale process will involve several rounds of bidding and the process could be completed by early May.

The bank hopes to maximise its return on the portfolio because the properties have already been repossessed and so the buyer will not have to take any enforcement action.

It is thought Danske, which sold its Project Arc portfolio to Green Reit before Christmas for close to €130 million, is not currently preparing any other large portfolios of assets for sale to follow Project Circle.

Potential bidders for the portfolio could include US firm Kennedy Wilson, which has invested heavily in residential property across Dublin. It already owns about 800 apartments in the city.

Peter Collins, who runs Kennedy Wilson's European operations from Dublin, said in January that it wanted to boost its portfolio "into the thousands" of residential units to give it a commanding position in the private residential market.