The sale by Oaktree of The Square is understood to have been held up following an objection from one of the US private equity giant’s lenders to the further substantial discount now set to be applied to the scheme’s already heavily-discounted guide price.
Having paid €250 million to acquire the Tallaght shopping centre from Nama in 2019, Oaktree put it on the market last June for €170 million. Where a sale at that price would have already seen Oaktree taking an €80 million hit, The Irish Times understands that bids for the scheme have come in between €120 million and €125 million, or just half of the US investor’s original outlay. The pan-European property investor Eagle Street Partners is understood to be vying with US real estate group Hines to secure ownership of The Square, with Ardstone Capital also still in the running out of the five parties who tabled bids originally.
While Oaktree and the main lender on the scheme, AIB, are said by sources to be prepared to dispose of The Square at around the levels being proposed by the three remaining bidders, London-headquartered M&G Investments is understood to have voiced its objections as a sale of the centre at such a heavy discount would see the mezzanine or junior debt it provided for The Square’s purchase being wiped out.
Contacted by The Irish Times, a source familiar with the details of the matter said they were confident that the current impasse could be resolved and that the sale of The Square would proceed without the need to appoint a receiver.
The €250 million paid by Oaktree for a controlling interest of 90 per cent of The Square’s shops in 2019 while significant, was still a long way off the indicative €640 million valuation the south Dublin scheme achieved in 2007 when financier Derek Quinlan’s Quinlan Private sold a stake of around 51 per cent to developer Noel Smyth for €320 million.
The Square has over 130 retail units and a 13-screen cinema distributed across 53,000sq m (570,486sq ft) of space, along with planning permission to extend and a site potentially suitable for housing.