herald

Saturday 16 December 2017

Dundrum put up for sale - a snip at €1bn

PROPERTY

Dundrum town centre is to go on sale with a price tag of up to €1bn, sources say.

Nama will begin the sale as early as next month after the state bad bank got full control of the retail hub in April, the sources said.

Nama inherited massive debts attached to the centre from AIB and Anglo, who loaned hundreds of millions to developer Joe O'Reilly.

The 150,000 square foot property will probably sell for around €1bn, property experts predict.

A previous valuation of the landmark shopping centre had pegged its worth at closer to €700m, prior to a recovery in the market.

The centre's tenants generate a retail income of €50m a year, meaning its new owners can expect a return of around 5pc a year. Opened in 2005, it has an annual footfall of 19m.

"There is a huge amount of appetite for retail assets right now," said Marie Hunt, head of research at CBRE Ireland. "Particularly since so few of these assets have been put up for sale since 2007."

Just two major retail developments have been sold since the start of the financial crisis. These are Liffey Valley Shopping Centre in west Dublin and the Acorn portfolio - consisting of shopping centres in Blackpool, Balbriggan and Clonmel.

Several sources said Dundrum will attract a new type of investor to Ireland. "Asian sovereign wealth funds are a real possibility. It will attract a new kind of high-quality buyer, one who maybe hasn't looked at Ireland previously," said one.

It's understood that Korean investors had been underbidders in the Liffey Valley Shopping centre.

Gulf sovereign wealth funds and major pension fund investors are also thought to have run the rule over the centre.

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