After NAMA in January 2013 sold its loan in the Treasury Holdings portfolio known as Opera, our interest in the fate of the 16 properties in the portfolio receded, but the ultimate sale of the properties or the loans underpinning the properties still gives us an insight into the Irish market, both the participants and prices. And this afternoon, the British commercial property portal CoStar claims that bidding for the assets has now been whittled down to three bids from our new philanthropic friends Kennedy Wilson, from Northwood Investors who bought the Bord Gais building on Warrington Place in Dublin 2 and from London and Regional.
We don’t know the bids, but CoStar suggests that it is south of the €270.4m valuation of the assets by Treasury Holdings in February 2012. The assets include Merchants Quay shopping centre in Cork and the Stillorgan shopping centre. With commercial property prices in Ireland down 68% from peak, and still falling, I would say it is well south of €270.4m!The portfolio was originally valued at €375m. CoStar has detailed reporting on what might be Northwood’s proposal which includes €50m of new funding and a premium interest rate payable on any loans that remain payable to the lender, Hypotheken Bank in Frankfurt.
Separately, NAMA is said byCoStar to have received just €100,000 from Northwood for its loans to Opera, loans which had a par value of €85m so the return was just 0.1c in the euro. In January 2013, the reporting was that NAMA had received a price equivalent to “single digits in the euro” but the impression was that it had received millions. CoStar’s reporting today, if confirmed, is sobering but probably reflects the floor for a mezzanine loan which offers a seat at the negotiating table.