Deutsche Bank Wins NAMA’s Project Maeve, Paying €97m For Loan Portfolio

The loan sales market continues in Ireland as today NAMA has confirmed the sale of Project Maeve to Deutsche Bank.

Deutsche Bank has been selected as the preferred bidder for NAMA’s €785m Project Maeve, paying around €97m for Galway based property developer Gerry Barrett’s loan portfolio.

Pricing reflects approximately 12 cents in the euro or an 88% discount on the original principal balance, which is indicative of the portfolio’s poor performing assets. 

Project Maeve, named after Ireland’s mystical Queen Maeve of Connacht, whose portrait used to grace the old Irish one pound note, is secured by 13 assets including three boutique hotels and the Scotch Hall shopping centre in Drogheda.

The hotels’ performance is not considered strong while NAMA’s capital expenditure programme for Scotch Hall shopping centre has far from turned the asset around amid strong local competition and ongoing weak occupancy levels.

The three hotels are: the five-star G Hotel in Galway, the only five-star hotel in the city; the four-star D Hotel in Drogheda and the four-star Meyrick hotel in Galway. Additionally, there are retail and residential properties in Galway, one property in Portugal as well as commercial and residential development sites.

The bulk of Project Maeve’s €7.6m total annual income is derived from the assets in Galway and Drogheda, including a combined 2015 forecast EBITDA of €1.8m for the three hotels.       

NAMA will be satisfied with this sale as it allows them to continue to wind down their book.  It is expected that NAMA will continue to sell off further loan books in the coming months. It will certainly be interesting to see what Deutsche Bank's business plan will be on this book and whether they will involve the original sponsor in the business plan.  We have seen in the past that investors who buy the loans from NAMA would work through the business plans with the former borrower.  It makes sense on many occasions as the borrower would be able to add significant value in terms of executing any business plan.

By Conor Devine MRICS GDP Partnership

Twitter @Conor_Devine