Hard for Hines to lose in Liffey Valley deal

With Liffey Valley Shopping Centre set to be the latest Dublin retail centre to change ownership, nobody can be as pleased as the dealmakers in Texas-based property group Hines.

Hines came together with HSBC Alternative Investments two years ago to buy a 73 per cent stake in the mall just as retail sales were beginning to recover following the economic crash. It paid British insurer Aviva €250 million for the interest.

This week The Irish Times revealed that Germany's largest public pensions group Bayerische Versorgnungskammer (BVK) was leading the race to buy the centre. It has since been established that the Munich group is the preferred bidder, which should see Hines, HSBC and Liffey Valley's long-term shareholder Grosvenor Group share more than €600 million between them.

While it’s believed that Hines was the junior equity partner in the centre, it also benefits from the fact that it received a €1.3 billion mandate from, well, none other than BVK earlier this year to source prime retail assets across Europe. It didn’t have to look very far to find this one.

Opening the process to a number of parties, in fairness, would have allowed for a market price to be set for the asset and made it easier for Hines to navigate its positions as seller and deal-scout for BVK. US real-estate investment bank Eastdil was hired to manage the sale.

It’s now emerged that Hines has the option to remain as asset manager at the shopping centre. Nice work if you can get it – especially as the mall is the recent recipient of planning permission to develop a 51,545sq m (554,825sq ft) extension, which would almost double its size.