NY firm to buy O’Flynn loan book

All three final bidders for the O’Flynn Group €1.8bn loan book sale via Nama have made offers over €1bn; New York-based Blackstone is set to be confirmed as the buyer, at €1.1bn, by Nama this week.

The number of bidders was whittled down to three — Blackstone, Lonestar, and Davidson Kempner — who all made final offers last Tuesday. News emerged in London property circles that Blackstone had the winning bid, with valuation inputs from a number of Irish property agencies.

The €1.1bn it is paying represents about 60% of the value of the loan book and is one of Nama’s most successful and best-yielding returns to date, netting a profit on the sum it paid to take on the loans — though the ‘haircut’ it applied to acquire them has never been divulged.

Once it is confirmed as the owner and the loans transferred from Nama, Blackstone will likely meet with O’Flynn Group executives to work on a strategy to maximise returns and developments. It may include the sale of some development land, and well-performing UK income streams.

About 75% of the O’Flynn investments and developments are in Britain, with strong Irish assets also, along with investment properties in Germany and Spain. There is an income stream of about €75m a year from the properties built up by O’Flynn Group.

The Irish assets include development land in south Dublin, on the Long Mile Rd and in Killiney, Cork’s €150m Elysian development, and current developments and sites in Ballincollig, Mahon, and other suburbs, as well as a big land bank at Dunkathel House.

O’Flynn Group was one of the top 10 Nama debtors, and among the first major players to emerge with a strong Irish portfolio element.

Established in 1978, the Cork-based company restructured under Nama. Several months ago, managing director Michael O’Flynn established O’Flynn Capital Projects to develop ‘wet assets’ needing restructuring, refurbishment, and further development.

Partners include O’Flynn Group individuals Patrick Cox and Simon Leadbetter, and former DTZ surveyor Fintan Tierney, based in Ballsbridge, with Michael O’Flynn as chairman. It also has offices in Cork and London.