US investment deal called off over bailout

A US INVESTMENT company which had agreed to buy 16 commercial properties mainly in Dublin for up to €120 million has cancelled the deal because of its concern about the Irish economy following the bail out by the IMF and the ECB.

Global private investment firm TPG Capital and its Irish partner, Green Property Company, were due to complete legal contracts before Christmas for the purchase of the Royal Liver Assurance company’s entire Irish portfolio, which includes high profile properties on Grafton Street and Henry Street in Dublin.

Apart from the recent financial bailout, the joint venture company was apparently concerned about the present political instability and the need for austerity measures in the Budget.

Green TPG Partners also feared that any further fall-off in consumer spending was likely to have a direct affect on rental returns from 15 shops in the portfolio.

Caroline McCarthy of agent CB Richard Ellis, which is advising Royal Liver, said it was disappointing that the sale was not to proceed because of the rapid change in economic conditions over recent weeks.

She said the partnership which carried out due diligence of the portfolio was “completely happy with its contents”.

There were 15 retail units in the 16 properties on offer, including McDonald’s fast food outlet and four other shops on Grafton Street, Hodges Figgis and Waterstones on Dawson Street, three shops on Henry Street, another one on Lower O’Connell Street, the 02 store on Patrick Street in Cork and the landmark Ballast office building on Dublin’s OConnell Bridge.

TPG Capital had apparently agreed to provide most of the funding for the purchase which, had it gone ahead, would have been the largest single transaction in the Irish market since the Bank of Ireland and AIB sold several portfolios of bank branches in 2006 and 2007.

Last June, Green TPG Partners announced that it would be investing up to €900 million of debt and equity in real estate assets in the UK and Ireland.

The decision not to proceed with the purchase of the Royal Liver properties raises the possibility that it may also steer clear of the first of a large number of investment properties due to be offered for sale in the new year by Nama.

TPG Capital has more than $48 billion (€36bn) of capital investment under management. Green has extensive property interests in Ireland and the UK and an annual rent roll of €100 million.

Its main Irish property asset is the Blanchardstown Town Centre.