The biggest real estate investment trust in America is believed to be the front runner among four potential buyers in the €1bn (£718m) sell-off of Ireland’s largest shopping centre.
Simon Property Group — which owns more retail centres and malls in the United States than any other property company — is known to have carried out a detailed examination of Dundrum Town Centre, near Dublin, prior to its disposal this summer by the country’s National Asset Management Agency (NAMA).
Described as the agency’s most expensive sell-off of assets and loans, NAMA has confirmed Hammerson, intu and Westfield have also showed interest in the 1.2m sq ft complex.
Built on the site of a former Pye television factory, Dundrum Town Centre was developed by the late Liam Maye, John Fitzsimons and Joe O’Reilly of Chartered Land. The ownership collapsed during the financial crisis with loans attached to the asset taken over by NAMA. In a surprise move the agency also bought up every other debt attached to the shopping centre, just south of Dundrum town centre, held by Ulster Bank and KBC Bank Ireland.
This summer’s sell-off has been codenamed Project Jewel, allegedly because Dundrum Town Centre is the jewel in NAMA’s crown. Other assets packaged into the portfolio include land adjacent to the complex already earmarked as an extension to the 169 unit retail site.
There is also a half share in the Pavilions shopping centre in Swords, with Irish Life and commercial property owner I-PUT each owning 25 per cent of the remainder, and a 50 per cent stake in another Irish Life co-owned shopping centre in the centre of Dublin.
The Simon Property Group, founded by brothers Herbert and Melvin Simon in 1960, is now under the sole control of real estate magnate Herbert Simon, ranked by Forbes magazine as the world 628th richest man with a personal fortune in excess of $2.8bn (£1.8bn). He also owns the Indiana Pacers basketball team.
If the Indianapolis-headquartered group is going to pull off its richest acquisition this side of the Atlantic, Simon Property will have to outbid FTSE-listed Hammerson, which holds retail assets across the UK and France valued at £7.7bn, including the Brent Cross Shopping Centre.
intu is also listed on the London Stock Exchange, as well as in Johannesburg, and already owns 18 UK shopping centres and three in Spain. The Australian-based Westfield controls 40 shopping centres worldwide along with major property assets in London, New York, San Francisco and Los Angeles.
Whoever turns out to be the eventual winner, Dundrum Town Centre is reported to generate around €50m (£36m) in annual retail income — meaning its new owners can expect a return of around five per cent a year on their investment.
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