Blackstone — which already claims to be the world’s biggest property owner — has agreed to pay Ireland’s National Asset Management Agency €1.1bn (£904m) for a loan portfolio once controlled by developer Michael O’Flynn.
Known as the Project Tower portfolio — and snapped up at a 38 per cent discount on its par value of €1.75bn (£1.4bn) — the package includes loans secured against a host of assets across Ireland, the UK and Germany and gives the New York-based Blackstone control of Cork city’s 17-storey Elysian Tower (pictured), the highest residential building in the republic.
Originally valued at €1.85bn (£1.5bn), the portfolio was cut by €100m (£82m) when Kildare Partners, a private equity firm led by Sunderland football club owner Ellis Short, bought a development project in County Cork for a reported €30m (£24.6m).
The number and range of properties covered by Project Tower is enormous. In Ireland, Blackstone will own 18 investment properties in Cork alone, including nine retail assets, and six office developments. There are another 50 commercial and 16 residential developments across the country, mostly in Ballincollig, Crosshaven and Mallow. The portfolio also once included a land bank of close to 1,200 acres spread between Dublin, Cork and Kerry.
In the UK, Blackstone will effectively own a huge portfolio of commercial property. It will take on loans tied to student accommodation in a host of British cities including Manchester and Liverpool and 15 office buildings, from central London to a business park in Leeds. There are also hotels, warehouses and logistics centres as well as a number of stalled development schemes.
The American private equity house has been an active player in the Irish commercial property market since the recovery began late in 2012. Earlier this year, Blackstone spent €100m on three office blocks in Dublin: Hume House, in Ballsbridge; and the Riverside IV and Bloodstone building’s in the Grand Canal Dock area. Last month it claimed it had raised $7bn (£4.1bn) to establish Europe’s largest real estate investment fund to date.
The O’Flynn Group has its headquarters in the Cork, where Michael O’Flynn established the business in 1976. The companies involved are O’Flynn Construction, mainly responsible for its Irish activities, Tiger Developments, the company behind projects in Edinburgh and London, and Victoria Hall, which owns and operates the student accommodation.
The group was one of Ireland’s biggest construction companies during the boom years and is one of only a handful of big builders to have survived the crash, albeit with the involvement of NAMA.
The agency confirmed that five international investment groups had shown interest, but that Blackstone outbid fellow US contenders Lone Star and Davidson, both of which offered less than €1bn (£822m), to acquire the Project Tower portfolio.
Previous Post
Retail Parks and Shopping Centres in Demand
