NAMA has formally announced the sale of its €1.8bn “Project Tower” loan portfolio to Blackstone.

The transaction, which had been well flagged, is expected to be completed this week.

The “Tower portfolio” is made up of loans, property and development linked to Cork developer Michael O’Flynn’s O’Flynn Group, and has a face value of €1.8 bn.

Michael O’Flynn, managing director of the O’Flynn group, welcomed the sale.

“As a strong and professionally organised group, it has always been our ambition, since the transfer of our loans to Nama in 2010, to fully co-operate and exit NAMA at an appropriate time. NAMA has always been clear that its role is not to be a long-term funder to this sector and its main focus was to improve the balance sheets of the banks participating in the scheme,” he said.

Strong

“In the Irish market in particular, there is a need for strong players in the property sector to address acute supply issues,” he noted.

Terms of the deal are commercially sensitive and are not being disclosed NAMA said, but the US private equity firm is understood to be paying about €1.1bn for the portfolio. That sale price would equate to a 38pc discount on the loans.

The portfolio includes loans secured against a host of assets across Ireland, the UK and Germany. Among the properties Blackstone is taking control of is the 17-storey Elysian Tower in Cork city.

Blackstone is the biggest private equity real estate firm in the world. It is also the biggest shareholder in Eircom which is being lined up for a possible stock market flotation after being rescued out of examinership two years ago.

NAMA chief executive Brendan McDonagh said the agency was pleased to have completed the transaction. “It provides further evidence of the current and continued strong investor appetite for real estate assets and property-related loans in Ireland and in other jurisdictions to which NAMA has a significant exposure.

“We are particularly pleased that the transaction has been agreed with such a reputable international counter-party as Blackstone,” he said.

Blackstone’s head of European Real Estate Ken Caplan said: “We are delighted to have had this opportunity to work with NAMA and to acquire the Tower loan portfolio and to expand our investments in Ireland, the UK and Germany.”