The Square shopping centre placed into receivership by AIB

One of Ireland’s biggest shopping centres, The Square in Tallaght, has been placed into receivership by key lender AIB.

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.

The day-to-day operations of the shopping centre – which was Ireland’s biggest 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.

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, The Square is located on a site of 11 hectares.

Before 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-19 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.