Whilst the eyes of the property industry are firmly focussed on NAMA’s intentions with its €9.25bn – by reference to November 2009 prices – Irish commercial property loans portfolio, in a market that was worth less than €0.5bn last year, it should be remembered that NAMA has competitors who are also sitting on vast portfolios of loans also.
Sources this morning claim that Ulster Bank is gearing up to offload its €1bn Dublin investment property loans portfolio, with four selling agents being contacted for their proposals. Some of the portfolio will be receivership sales, some will be consensual sales though they’re more likely to be what the Americans call “short sales” – that is, sales of distressed lending by the borrower under the oversight of the lender. The four agents are understood to have until tomorrow, 7th March to respond to Ulster Bank with their proposals and this development may come as news to the “short sellers”. It is further suggested this move comes after Ulster Bank’s parent, Royal Bank of Scotland in London decided to change tack and abandon its original intention to warehouse the loans following a GBP 2bn (€2.4bn) loss for 2011 reported two weeks ago. The move, if confirmed, would indicate a lack of confidence in any recovery in Irish commercial property prices in the short to medium term.
The Ulster Bank portfolio is spread across the capital, but one jewel in the crown is the loan behind 78a Sir John Rogerson’s Quay, the headquarters of State Street Bank in Irelandand which last November 2011 was reported to under consideration by Ulster Bank for a one-off sale. Its developer, Liam Carroll’s Danninger is bust and Ulster Bank was said to be considering several offers for the 175,000 sq ft building – pictured here – with an annual rent roll said to be over €7m. If the latest claim is confirmed, it may now be offered as part of the Ulster Bank portfolio.
And how will NAMA now respond to unexpected competition?
No comment was available from Ulster Bank in Dublin at time of writing.
UPDATE: 6th March, 2012. Ulster Bank has declined to comment on individual cases which is to be expected. It seems that the deadline for agents’ submissions has now been extended to Monday morning next, 12th March 2012. It seems the portfolio totals some 70 loans and includes some from foreclosed developers like Liam Carroll and others whose loans haven’t been foreclosed. The loans are secured on a mix of residential, including one-off houses, and commercial property and are understood to include shopping centres in Dublin and 300 rented apartments in Tallaght and 1/3rd of the portfolio is now understood to relate to Northern Ireland.