Anglo set to cut its UK exposure as buyer eyes bank's 'mega mall'
Australian developer expresses interest in €258m London retail outlet
Published 11/11/2011 | 05:00
ANGLO Irish Bank (now known as IBRC) looks set to be given a chance to dramatically cut its exposure to the UK retail scene as a potential buyer makes an approach to purchase one its so-called 'mega malls' in England.
IBRC has a stake in the Whitgift mall in Croydon, south London and has been using Jones Lang LaSalle to sell the asset.
A statement to the Australian stock exchange this week suggested that the Australian developer Westfield may take an interest in the mall.
It is suggested that this may include taking a stake in Anglo's leasehold interest in the property. Anglo bought the asset in 2005, along with Howard Holdings, for £220m (€258m).
It is unlikely that Anglo will recoup this amount, although retail assets in the UK have proven far more resilient than those in Ireland.
According to its website, Whitgift plays host to the likes of Marks & Spencer, Foot Locker and Monsoon. It is believed to be free of too much retail competition in its hinterland.
The actual freehold of the mall is owned by the Whitgift foundation. Talks between Westfield and this foundation are likely to take place first, before IBRC gets involved.
IBRC, which changed its name during the summer, is trying to exit large-scale retailing as part of an overall wind-down plan.
It has already sold off a large portfolio of loan assets in the US and is now concentrating on its Irish and UK assets.
It has told the Government here that it needs up to 10 years to wind down, but there are increasing signs this can be done in a far quicker time, depending on the kind of valuations that the property market achieves.
Chief executive Mike Aynsley has said the bank will not accept firesale prices, but it may find it easier to shift assets by packing them up and making them more attractive for buyers.
This week, one of the world's largest private-equity funds, Blackstone, was in Ireland and is believed to have looked at distressed real-estate deals.
IBRC could offload some of its Irish portfolio to this group but if the prices are well below the current balance sheet value of the assets, Anglo is likely to hold its fire.
Despite suffering crippling property-related losses, the bank claims that it does not now need any further capital.