News: Northern Ireland Property Loans Sold to US

The US-based private equity fund Cerberus has bought loans related to Northern Ireland properties from the Royal Bank of Scotland.

Ulster Bank, which operates under RBS, is the largest bank in Northern Ireland and the third biggest in the Republic of Ireland.

The bank told the stock markets that the sale of these loans is part of a wider deal worth £1.1bn.

The portfolio, known as Project Aran, is made up of around 5000 properties and includes shops, hotels and retail units; most of which are in the Republic of Ireland, with 20 per cent in Northern Ireland.

RBS announced the sale an hour after reports that it had passed the stress test by the Bank of England. The deal is expected to complete in the first quarter of next year.

Strengthened recovery?

Cerberus has also acquired properties from all corners of the globe; on 16 October it agreed to purchase a £1.2bn portfolio of commercial property loans from National Australia Bank (NAB).

The deal builds on a £625m set of loans NAB sold to Cerberus in July as the bank’s chief executive planned its British exit.

NAB chief executive, Andrew Thorburn said the deal was: “another important milestone in our strategy of reducing our low returning legacy assets and sharpening our focus on our core Australian and New Zealand franchises”.

The Financial Times’ Claer Barrett and Jennifer Hughes said that while Cerberus is taking on a total of £2.3bn it is also taking a bet on the strengthened recovery in the regional values of the UK and Ireland property markets.

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