Deutsche seals deal for €300m Project Lee portfolio from Nama

Portfolio of fully-performing loans connected to O’Callaghan Properties who welcomed deal

The portfolio of fully-performing loans, dubbed Project Lee,  represents the last of Nama’s big portfolio sales.Photograph: Cyril Byrne

The portfolio of fully-performing loans, dubbed Project Lee, represents the last of Nama’s big portfolio sales.Photograph: Cyril Byrne

 

Deutsche Bank has agreed to buy a €300 million portfolio of property loans from Nama that were associated with the late Cork developer, Owen O’Callaghan.

The portfolio of fully-performing loans, dubbed Project Lee, came on the market early in the summer and represents the last of Nama’s big portfolio sales. The borrowings are all connected to O’Callaghan Properties, and are secured on buildings in and around Cork city.

It is understood the deal has been agreed with Deutsche but has yet to close. Nama was unavailable for comment last night. O’Callaghan Properties, meanwhile, said it was “delighted” with the situation.

“We are concentrating on our core development portfolio of offices and residential [development] in Cork, Dublin and London at the moment and this new arrangement with Deutsche Bank will help us create further opportunities from the Project Lee portfolio over the next two to three years,” it said.

The bulk of the loans are secured on Mr O’Callaghan’s Opera Lane mixed-use development in Cork city centre, and the Mahon Point Retail Park, adjacent to a shopping centre built by the developer in the last boom.

Some of the loans are also secured against apartments at Lancaster Gate, close to University College Cork, and also an office complex at Half Moon St. Most of those offices are occupied by Apple, which has several hundred workers onsite.

It was reported during the summer by the Irish Examiner that the loans had an income stream of about €12 million per annum.

It is believed Deutsche has bought the assets for their potential to produce a steady return over the long term. Financial firm EY was retained to conduct the sale for Nama.

The agency first tried to sell the loans about three years ago, but it was delayed by legal and administrative hold-ups, followed by the death of Mr O’Callaghan in January last year.

Mr O’Callaghan was known as one of the State’s most successful boomtime developers, and he was one of only a handful to walk away from the property crash that occurred a decade ago.

His best-known project, by far, was not in his native city of Cork but rather the Liffey Valley shopping centre in Dublin. He also built the Arthur’s Quay scheme in Limerick and the Golden Island shopping centre in Athlone.