Eagle Street Partners, the property asset manager founded by two former senior Glenveagh Properties executives, has been selected as the preferred bidder for the Square Town Centre in Tallaght, almost two months after the landmark retail complex was put into receivership, according to sources.
The value of the offer could not be established. However, the owners of the shopping centre, US investment firm Oaktree Capital, had been in exclusive talks earlier this year to sell the asset to Texas-based real-estate investment manager Hines for a knock-down price in the region of €125 million.
AIB, which is understood to have more than €140 million of loans out against the centre, moved in May to appoint Kieran Wallace and Eamonn Richardson of Interpath Advisory as joint receivers after the process with Hines stalled. The move into receivership was made with the consent and co-operation of Oaktree.
Oaktree paid the National Asset Management Agency (Nama) €250 million in 2019 for 90 per cent of the centre, which has 130 retail units and a 13-screen cinema distributed across 53,000sq m (570,486 sq ft) of space, along with planning permission to extend and a site potentially suitable for housing. AIB backed the Oaktree deal.
Anchor tenants at the complex include Tesco, Dunnes Stores and Penneys. Other key retailers include H&M, Boots, River Island and Sketchers.
The collapse in the value of the asset since then reflects a wider downturn in retail property in recent years, as the pandemic accelerated the trend of online shopping and as rising interest rates hit the wider real-estate sector.
The Square, which opened in 1990, was valued at about €640 million in 2007 when developer Noel Smyth bought a portfolio of 68 shops in the centre, the equivalent of more than half of the complex.
Eagle Street was set up in late 2020 by chief executive Shane Scully, previously chief development officer at Glenveagh’s business building apartments for buy-to-let investors, and Glenveagh’s co-founder and former chief executive Justin Bickle. Mr Bickle died two years ago.
The firm has invested more than €650 million of capital in commercial property, according to figures on its website, mainly in the residential and office sectors in the UK and Ireland.
Irish interests include a joint venture with London-based Nuveen Real Estate, currently developing 702 apartments in Castleforbes Business District in Dublin’s north docklands; a nearby development partnering with Chicago’s Harrison Street to deliver 554 residential units; and office blocks in Clonskeagh, Dublin 14.
AIB’s decision to put the Square into receivership was said to have been a result of frustration at the pace at which the Oaktree process with Hines had been progressing. It is understood Hines had also submitted a bid as the receivers reopened the process.
The Square carried a price tag of between €160 million and €170 million when it was initially placed on the market last year.
The €125 million Hines bid meant AIB was going to take a haircut on what it was owed, while a junior lender to the complex, M&G Investments, faced losing its investment.
Property developers Ardstone, which owns the Citywest Shopping Centre in Dublin, and businessman Eamon Waters, who has been very active in recent years buying property around the capital after selling his majority stake in the company behind the Panda and Greenstar waste firms, had also previously had bid interest in the Square.
Separately on the commercial property front, Bahrain-based investment firm Investcorp said on Thursday its European real-estate business has acquired two retail park assets in the Republic.
The properties, Letterkenny Retail Park in Co Donegal and Deerpark Retail Park in Killarney, Co Kerry, were acquired in a single transaction. It is understood the combined value of the deals amounted to €40 million.
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