Kennedy Wilson Partnership Picks Up $449M Irish Loan Portfolio

Kennedy Wilson has partnered with Deutsche Bank AG’s European Commercial Real Estate Group to buy a loan portfolio secured by commercial real estate assets in Ireland.

In a partnership with European Commercial Real Estate Group of Deutsche Bank AG, Kennedy Wilson has acquired a loan portfolio secured by commercial real estate assets in Ireland. The unpaid balance on the group totals $449 million.

Located predominantly in Dublin, the real estate attached to the loans runs the gamut of property types. For the bulk of the portfolio, consensual workouts are underway.

“We are seeing signs of recovery in the Irish property market,” said Mary Ricks, president and CEO of Kennedy Wilson Europe. “Investor confidence is returning and there is a good macro-economic recovery story in Ireland that is starting to play out.”

Indeed, in terms of investor interest in debt acquisition, Ireland is being closely watched. “Spain, the UK, the US and Ireland continue to be viewed by both sellers and buyers as the countries with the highest potential for debt sale transactions globally,” according to a report by KPMG International. A total of roughly $730 billion of non-performing loans are on the balance sheets of Irish, Spanish and U.K. banks.

Snapping up a large portfolio of loans in Ireland, performing or otherwise, is no simple feat, particularly since the country is somewhat a newbie to the debt sale game. “Banks and investors don’t have five years’ worth of bid/ask closing experience to draw upon,” as noted in the KPMG report.  “Given the scale of the macroeconomic real estate declines across the country, this has made transactions extremely challenging without a very motivated and informed vendor.”