Hammerson closes €1.85b Irish Project Jewel loan deal

UK REIT Hammerson has announced the closing of the acquisition of the Project Jewel portfolio of loans secured against a number of retail assets in Dublin, including the Dundrum Town Centre, Ireland’s top shopping and leisure destination.

A 50-50 joint venture of Hammerson and Allianz said last month that it had signed an agreement with Ireland’s National Asset Management Agency (Nama) to buy the package for €1.85 bn, representing a 28% discount to the face value of €2.57 bn.

Under the long-term joint venture structure, Hammerson will own 50% of Dundrum Town Centre and Dundrum Phase 2 alongside Allianz, and act as asset and development manager. Hammerson will own 100% of the remainder of the collateral assets - the Dublin Central Development site, 50% of the Ilac Centre, 50% of The Pavilions. Following the final allocation of properties, Hammerson’s total share of the deal would be €1.23 bn.

Hammerson is funding its share of the transaction from existing financial resources and a new €1.0 bn revolving credit facility with a maturity of March 2017. The new credit facility will be refinanced from a combination of an acceleration of the current disposal programme and future capital markets issuance. ‘We are currently marketing £200 mln of assets for sale. We also intend to execute previously identified disposal opportunities by the end of 2016 which could total up to a further £300 mln,’ the UK retail specialist said, adding that it remains committed to a long-term strategy of prudent leverage of less than 40% LTV.

Irish bad bank Nama hired real estate investment banking advisory firm Eastdil Secured, part of the Wells Fargo Group, to manage the sales process in June. The package was expected to generate a price in the region of €1.5 bn, or a 33% discount to the face value of the portfolio.

Opened in 2005, Dundrum is located 5 klm south of Dublin and extends to 140,000 m2 and is anchored by four department and flagship stores (House of Fraser, M&S, Harvey Nichols and Penneys) alongside a Tesco superstore, 120 retail shops, 38 restaurants, a 12-screen cinema and 3,400 space customer car park. Dundrum has won over 30 industry awards and is Ireland’s only super prime regional shopping centre.