Vulture fund to auction Tuam development

Tuam’s attractiveness as a location for property investors will be put under the spotlight next week when a US vulture fund auctions off a large apartment and retail development in the town.

The Lár na Cathrach development at Abbey Trinity will be sold in an Allsop Private internet-only auction next Tuesday, and is going to the market with a reserve price range of €1.2m to €1.3m.

Risali Ltd – an Irish arm of the New York private equity firm Apollo Global Management – purchased the loans of DHB Holdings Ltd in December 2012 from Bank of Scotland (Ireland), and appointed receivers to the property in May 2015.

The fund is now offloading the portfolio at Chapel Lane and Egan Lane.

The portfolio was purchased by the vulture fund at a knock-down price which has not been disclosed – DHB Holdings purchased the property from its subsidiary DH Burke & Son Ltd in January 2003 for just under €1.4 million.

While the sale price for the Lár na Cathrach loans is unknown, it was part of the ‘Project Lane’ loan book of more than 500 properties (owned by a variety of investors/developers), which sold at a 90% discount to Risali Ltd.

The building contains 62 parking spaces in the basement, a total of 13 ground floor retail units (where Lumberjacks Pizza is currently an anchor tenant); part of the first floor commercial space used as a restaurant, and 14 duplex two-bed apartments and six single-storey two-bed apartments on the second and third floors.

The vacant commercial element of the building is finished to shell and core only.

Two of the retail units and the first floor restaurants are leased on short-term tenancies with a cumulative rent of €41,600 per annum, while 19 of the apartments are occupied – including eleven corporate lets to Valeo Vision Systems. The gross residential income is €117,900 per annum.

Bidding in the online auction will commence next Tuesday at 8am, and is scheduled to finish shortly after 9.30am.

Although the price paid by the vulture fund for this particular DHB Holdings portfolio – held against mortgages and securities from Bank of Scotland (Ireland) – is confidential, documents filed with the Companies Registration Office by receivers Eamonn Richardson and Kieran Wallace of KPMG showed an estimated value in 2012 of €5.2 million.

As well as Lár na Cathrach, that DHB portfolio included property at Mellows House and Chapel Lane in Tuam; 15 acres in Milltown; land and premises at Baylough in Athlone; industrial units near Dublin Airport and a three-storey office building in Smithfield, Dublin.

Bank of Scotland (Ireland) moved on the empire owned by Kevin Burke from Tuam and Marie Burke from Dublin in 2012 – at the time, it was one of the biggest property groups in the West of Ireland, but had debts of more than €80 million.

The property empire spanned industrial, hotel, commercial, residential and shopping centre interests in Ireland, the UK, Poland, Sweden and Portugal.

DHB Holdings also owns DHB Construction, DH Burke Sweden AB and D.H. Burke Portugal, as well as controlling shares in Grupo Eko Plus, Limeryk Investments and Amigo Investments in Poland.

DH Burke and Son owns, or has controlling shares, in Bontex Ltd, Fortress Properties Ltd and DH Burke (UK) Ltd.

The empire was founded by the late Progressive Democrat councillor Joe Burke, who was best known as the face of DH Burke Supermarkets, which he sold a number of years before he passed away in 2001.