ISIF and Quadrant Real Estate Advisors announce €100m platform for financing Irish office development projects
5 November 2015 - The Ireland Strategic Investment Fund (ISIF) and institutional clients of US-based Quadrant Real Estate Advisors LLC have committed up to €100 million for financing high-quality office development and construction projects in Ireland.
Under the investment mandate agreed with the ISIF, Quadrant will manage the provision of "senior stretch" loans, ideally suited to Grade A office development projects in strong markets which have planning permission but which may not yet have letting or sale agreements in place. The ISIF, which is controlled and managed by the National Treasury Management Agency (NTMA), will invest up to €50 million alongside up to €50 million of capital from Quadrant's wider institutional client base.
It is anticipated that the investment will accelerate the delivery of urgently required prime office space, thereby improving the attractiveness of Ireland for foreign direct investment (FDI). It also has the potential to create in excess of 1,500 full-time construction jobs.
Quadrant, which manages approximately $6 billion of commercial real estate assets, has completed a number of finance deals in Ireland and the UK over the past year during which time it has deployed over €100 million to finance real estate projects in Dublin, Liverpool and Manchester. In addition to the Quadrant office development and construction mandate announced today, which has been tailored to meet ISIF's specific investment criteria, Quadrant is in active discussions with a number of Irish developers in respect of projects including hotels and residential developments in Dublin and other locations which will be financed from Quadrant's wider client base.
Speaking today, Kurt Wright, CEO of Quadrant, said that the company would address an important gap in the market: "Finance for office development projects is in short supply in Ireland with the main banks restricting their finance to the lowest risk projects which have letting or sale agreements in place from the outset. We will work with developers in the early stages of projects where the risks are higher but where the rewards are greater. In addition to making funds available to developers, such construction projects will have the benefit of supporting job creation and economic
growth in Ireland."
ISIF Director Eugene O'Callaghan said; "At present, there is a clear lack of comprehensive development finance packages for high-quality office development and construction opportunities and this investment mandate will help deliver commercial premises which meet the growing requirements of the marketplace. It's a good example of ISIF's flexibility and capacity to act as an "accelerator" when commercially attractive investment opportunities arise."
Notes to Editor
Senior stretch loans
Senior stretch loans are loans with higher loan-to-cost ratios than typical senior loans. In effect, senior stretch loans combine traditional senior and mezzanine finance.
The Grade A vacancy rate in Dublin 2/4 at the end of Q3 2015 was 1.2% (Source: CBRE).
Quadrant Real Estate Advisors LLC:
Quadrant Real Estate Advisors LLC (Quadrant) is based in Atlanta, Georgia in the United States. The company has almost $6 billion in assets under management and has closed in excess of €100 million of facilities in the UK and Ireland over the past 12 months. It originates in the region of €1.5 billion in private debt each year and operates in the US, Ireland, the UK and Australia. Quadrant sources investment funds from Public Pension Funds, Reinsurance Companies, Sovereign Wealth Funds and Life Insurance Companies. For more information on Quadrant please visit www.quadrantrea.com
Ireland Strategic Investment Fund:
The ISIF was established by the Irish Government in December 2014 with a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. At end September 2015 the Fund stood at €7.5 billion. For more information on the ISIF
please visit www.isif.ie