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Nama 'key vendor' of European assets in short term, says property giant

By Peter Flanagan

Published 22/07/2015

Frank Nickel: 'It would be a mistake to assume that activity in the Europan commercial real estate loan sales market is subsiding'
Frank Nickel: 'It would be a mistake to assume that activity in the Europan commercial real estate loan sales market is subsiding'

The Republic's bad bank Nama will be the "key vendor" of European property assets over the next two years and is likely to be far more significant than other European equivalents over the short term, according to property giant Cushman & Wakefield.

Unlike Spain's Sareb and Britain's UK Asset Resolution Ltd (UKAR), Cushman & Wakefield (C&W) points to Nama's own target of redeeming 80% of its bonds by the end of next year and being complete by 2018 as being the key driver of upcoming sales.

"The Irish asset management agency is currently [about] 29% through its deleveraging plan.

"In comparison, both UKAR and Sareb have relatively long term strategies due to their residential nature and the enormity of their portfolios," C&W say.

The report states that European bad banks - both public and private - have taken on assets with a par value of some €233bn (£164bn) since the crash. Nama was the third biggest of those asset managers with assets worth €73.4bn (£52m). However, when taking into account IBRC's €21bn (£15m) worth of assets and Ulster Bank's Irish loans which are wrapped into UKAR, over a third of all assets managed by Europe's bad banks originated in Ireland.

Large US firms remain the biggest buyers of assets from the bad banks. LoneStar bought most of the IBRC portfolio.

Cerberus, which has hit headlines in recent weeks over its purchase of the Project Eagle portfolio of Northern Ireland property, has taken on 18% of assets.

There have been relatively few major sales completed so far this year. Project Rathlin - a portfolio of Northern Irish loans tied to RBS - and Project Octopus - a loan portfolio tied to Germany's Commerzbank - are the only sales worth over €1bn (£0.7bn). The loans in Project Rathlin were sold to Cerberus for £205m in May.

C&W partner Frank Nickel said over €30bn (£21bn) worth of sale processes were currently taking place. "It would be a mistake to assume that activity in the Europan commercial real estate loan sales market is subsiding.

"Behind the scenes there has been a flurry of preparation work as key vendors line up 'mega deals' for the second half of the year.

"Investors will have plenty of distressed opportunities," he said.

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