Although it is also the season for indulging in fairytales, Chris Wilson claims there is a very real light at the end of the tunnel for not only the local property sector but also property-related businesses which are beginning to emerge from a prolonged period of downturn-imposed darkness.
Wilson, the managing director and head of Jefferies LoanCore in the UK, has put money behind his belief: Jefferies LoanCore is a New York-headquartered, commercial real estate finance company and it has so far lent more than £350 million in Europe – with the majority of it in the North.
Wilson first started looking at opportunities in Northern Ireland in August 2014. One of the earliest investment meetings he had was with the Belfast developer Paddy Kearney who controls Kilmona Holdings and whom Jefferies LoanCore subsequently backed to refinance his loans with Cerberus.
A few weeks ago Wilson travelled from the US to help Kearney celebrate his plans for a £200 million investment project across five sites in Belfast and to be formally “introduced” in the North by the developer.
Last month the American company also completed its first deal in the Republic when it backed the Ronan Group’s multi-million euro acquisition of a site which was part of the former Allied Irish Bank’s headquarters in Dublin.
Core markets
According to Wilson, Jefferies LoanCore now considers Belfast one of its core markets, while it is on the lookout for opportunities across the whole island, where it is willing to invest “hundreds of millions” of euro or sterling in the right projects.
“When you look at Belfast it’s in the very early stages of recovery and it presents a very good opportunity because of its potential,” he says.
Wilson highlights that because of the nature of the local market prices in Belfast are well below replacement costs and prime yields remain attractive, but more important is the current lending environment post the property crash.
“There is a demand from people who want to rebuild their businesses, who have a good portfolio of assets and who need new financing and that’s where we come in,”
Wilson believes that Jefferies LoanCore “is the next step in the chain” post Nama and post its portfolio sale and the large-scale purchase of non-performing loans by Cerberus.
“We see an opportunity to provide liquidity and to recapitalise companies on the back of being in Nama,” he says.
Jefferies LoanCore typically provides financing for commercial property projects through fixed and floating rate senior and mezzanine loans, and also bridge loans, with a particular focus on fixed rate loans.
While the terms of any arrangement with a company or an individual will never be disclosed there is one element that Wilson is happy to discuss and that is the absence of personal guarantees in the contracts. He doesn’t believe in them and sees no value in them and instead says the emphasis should be on the portfolio of assets and the team and staff that are behind a business.
While he is “keeping a watchful eye” on the political situation he says he is reassured that everyone in Northern Ireland has “too much to lose” for everything to fall apart on that front.
“I’ve been inspired by the personal stories of some of the people I’ve met and done business with - how they built their businesses through the Troubles and how they have worked so hard to resurrect them following the collapse in the market - they are the people who value what we are doing,” Wilson adds.
