The deal highlights the scale of the decline in commercial property values.
High-profile accountants Kieran Wallace and Eamonn Richardson of Interpath Advisory have been appointed by the bank as joint receivers and managers, with the consent and co-operation of owner Oaktree Capital Management.
The move by the bank follows a stalled sales process.
It was reported that offers in the region of €125m had been made
The day-to-day operations of the shopping centre – which was Ireland’s biggest mall when it was opened in 1990 – will not be affected. And owners of the independently owned units at the centre will not be impacted by the receivership.
Today’s News in 90 seconds – 23rd May 2024
In a statement, Interpath said all parties are committed to working together to complete an orderly sale of The Square to a new owner.
The move by AIB comes after Oaktree put The Square on the market last year, with a €170m price tag. However they failed to land a deal at that price.
Earlier this year, the Irish Times reported that offers in the region of €125m had been made.
That would be just half the €250m Oaktree paid Nama for the shopping centre in 2018.
And that in turn would be less than half the €640m valuation the scheme carried in 2007 – when financier Derek Quinlan’s Quinlan Private sold a stake of around 51pc to developer Noel Smyth for €320m.
Oaktree’s 2018 purchase was backed by AIB as senior lender, with additional lending coming from UK lender M&G Investments.
The acquisition included control of 118 of The Square’s 160 shop units, a cinema with 13 digital screens, and more than 2,400 car spaces.
The centre is anchored by Dunnes Stores and Tesco. Penneys opened a large shop in the centre two years ago.
Extending to 53,603sqm (577,500sqft), The Square is located on a site of 27 acres.
Prior to the Oaktree sale, Nama had acquired and amalgamated various borrowers’ interests in what had been a highly fractured ownership in order to execute a single large-scale disposal.
Oaktree is the second US private equity giant to have been burned on a major retail investment here.
US investment giant Blackstone bought the bigger Blanchardstown Centre shopping complex for €950m from Stephen Vernon’s Green Property in 2016 but ended up walking away from the retail asset as values plummeted during the Covid pandemic.
Goldman Sachs, which had been a lender on the Blackstone investment, ended up owning the shopping centre and other associated assets after it swapped its debt to lead a takeover of the property. The 2020 deal valued the Blanchardstown Centre at around €750m. More recent bids earlier this year for the property are reported to put the current value at closer to €550m.