When the dust settles, who's still standing?
When the crash came, many empires crumbled into dust. But not all of them. Ronald Quinlan charts the risen people of the building trade
Published 09/03/2014 | 02:30
AT the height of the boom, their fortunes were counted in the hundreds of millions. But when the crash came, the value of the empires of Ireland's developer caste evaporated.
With little or no funding for development and even less demand, some of our biggest property tycoons were left with no option other than to pull the plug.
As the crisis deepened, Ray Grehan, Bernard McNamara, Paddy Shovlin and Sean Dunne were just some of those who put their hands up and declared themselves bankrupt. But while numerous developers fell by the wayside, there are plenty who've managed to survive the first great depression of the 21st Century.
Whether it's the quality of their assets, their expertise or sheer ability to see and strike a deal, they're the survivors of Irish property.
Asked in his evidence at the Anglo trial if he had been one of Ireland's biggest property developers in 2008 and if his net worth had approached €1bn, Gerry Gannon was brief in his answer. "Probably yeah," he said, before going on to recount how he had been offered an opportunity to snap up one per cent of Anglo's shares because he was a "good customer of the bank".
These days, the developer known as the "man in the hat", owing to his penchant for sporting a Fedora, is a good customer of Nama. Unlike some of his peers, Gannon managed to negotiate a way forward with the agency, which has allowed him to continue living in splendour in his Howth mansion while drawing down an annual salary of some €170,000.
In dealing with Nama, Gannon did, however, have to hand over family assets worth tens of millions of euro to the agency including sites, houses and artworks. In 2012, he sold his 49 per cent share in the K Club to Dr Michael Smurfit for €40m. He also offloaded 38 development and investment properties across Victoria, Chelsea and Covent Garden in London for some €121m, which he repaid to Nama to help reduce his debt.
Given his co-operation with Nama, his many years of experience as a house builder and the massive land banks he assembled in north Dublin prior to the crash, Gannon is said by other developers to have a strong chance of surviving in business thanks to the resurgence of demand for family homes in Dublin and the need for experienced developers to build them.
Unlike Gerry Gannon, Joe O'Reilly wasn't quite as sure if he had been worth €1bn back in 2008. "Hard to tell," he said when asked in his evidence to the Anglo trial.
Whatever wealth he had before the crash, however, pales alongside the €2.8bn his companies owed when his loans were taken into Nama in 2010.
Had it not been for the quality of his assets, which include Dundrum Town Centre, Pavillions in Swords, the Gaiety Centre on Dublin's South King Street and offices at Grand Canal Dock, it's probably fair to say that the Dromard man's chances of surviving the Nama process and of continuing to live in his 15,000sq ft Foxrock mansion, Cnoc Ard, would have been lessened considerably.
But the combination of a high-quality property portfolio and its lucrative rent roll coupled with well-located land banks in Dublin makes O'Reilly worth every cent of the €200,000 annual salary Nama allows him. It also makes him, or at least his assets, highly attractive to international investors looking to buy into Ireland's recovering property market.
Ireland's retail Mecca, the Dundrum Town Centre, stands out as the O'Reilly asset that most potential foreign buyers are interested in taking a piece of.
Elsewhere, O'Reilly's ambitious plans for a new €900m retail quarter in and around Dublin's O'Connell Street would be sure to attract overseas interest too given the fact that O'Reilly has done the hard yards on the project in assembling the site and securing planning permission for it.
From stonemason to one-off house builder to major developer, Sean Mulryan's ascent within the property industry has been nothing short of meteoric. And thanks to some particularly canny investments in 'brown field' sites in the London docklands in the early 1990s and long before the area was fashionable, the Roscommon-born tycoon has found himself nicely equipped to grind his way back out of Nama.
At the time of transfer into the State's bad bank in 2010, Mulryan's loans amounted to a staggering €1.55bn. By January 2012, a series of sales, refinances and joint ventures saw the group's Nama debt reduced by over 50 per cent.
At the launch of its £700m development at London City Island in Canning Town last October, Ballymore signalled its intention to "be clear of Nama and back in the equity markets by the middle of 2015".
Mulryan's group strategy director, Paul Keogh, also revealed Ballymore was back building houses in Ireland with construction under way on a project in Terenure in south Dublin, which had been mothballed in 2006. Keogh added that Ballymore would "probably" act as a builder for Nama on land that it had taken over from other builders who had gone bankrupt.
With 45 years' experience as a property developer, one could hardly blame Michael O'Flynn if he were unhappy with having his companies' loans taken over by a bureaucratic behemoth like Nama. But he's co-operated with the agency and worked hard to find a way back out, hunting high and low over the past four years for prospective buyers to refinance his debt.
Those efforts would appear to be paying off with formal confirmation coming last month that Nama is putting O'Flynn's €1.8bn borrowings up for sale. Once completed, the deal will represent the single biggest transaction completed by Nama since its inception in 2009.
With assets spread across Ireland, the UK and Germany and a healthy annual rent roll of €75m, the Cork-based businessman's €1.8bn in loans are already understood to have attracted interest from up to 10 potential buyers, including Goldman Sachs, Deutsche Bank and private equity giant Lone Star.
When Treasury Holdings went into liquidation groaning under the weight of its €2.7bn debt, you could have been forgiven for thinking it was the end of JR's career.
Not so. For even as Nama picks over the carcass of the empire he assembled with Richard Barrett over 30 years, the so-called 'bearded buccaneer' has been busy "recalibrating" his personal portfolio through a series of asset sales in a bid to raise funds for fresh property development.
Having offloaded Temple Chambers for €13.3m to Doyle Hotel doyenne Bernie Gallagher last year, Ronan now stands to gain from the sale of 8-34 Percy Place, a Dublin 4 office block in which he holds a major stake. The building went up for sale last autumn with the expectation that it could raise in the region of €8.5m.
The former Treasury chief's growing war chest was nearly called into play last November when he teamed up with US investment giant Kennedy Wilson to submit a joint bid for 43-49 Mespil Road.
Davy Property Investments won out, however, snapping the building up for just over €16m.
The Cosgrave brothers – Joe, Peter and Michael
The bubble was about to burst, but you never would have known it judging by the 1,200 people who showed up for the 2007 annual property awards at the Burlington Hotel. The Cosgrave brothers were the big winners on the night, picking up the coveted Irish Developer of the Year Award.
Seven years on and with Ireland's property market showing signs of emerging from one of the most severe crashes ever experienced by a modern economy, the Cosgraves have seen off the competition again, simply by staying afloat.
More than that, the brothers' Cosgrave Developments looks likes it's making a major comeback thanks to the resurgent demand for family homes in Dublin and beyond.
Having offloaded all 65 four-bed houses in Honeypark in Dun Laoghaire last year for asking prices of €435,000 and over, the Cosgraves have recently sold 30 five-bed homes at the development on the former site of Dun Laoghaire Golf Club. With prices starting at €565,000, the €17m earned should be enough to keep both the Cosgraves and their lenders in Nama happy.
While he's been a property developer since the 1970s and is well-known in the industry, Eamon Duignan has never been one to court publicity. As a policy, it's served him well so far. That low profile helped Duignan to slip quietly out of Nama just before Christmas with the sale by the agency of his companies' €250m debt to Carval Investors.
Since making what some developers have enviously described as 'the great escape', the Meath-based developer has been working closely with his new lenders, and is busy preparing plans for two new shopping centres. Duignan is understood to have secured a major retailer as anchor tenant for both developments already.