Fears Nama will step up sales of UK properties
Published 01/05/2011 | 05:00
There are growing fears that Nama will conduct a fire sale of major London properties seized from Irish developers in a bid to boost its revenues.
The "bad bank", set up to take over the toxic property loans of the country's banks, intends to aggressively step up sales of property backed by bad Irish debt in the UK.
As part of an ambitious strategy to reduce its €77bn loan book by a quarter by the end of 2013, Brendan McDonagh, Nama's chief executive, said he would push through the sale of at least €2.5bn of UK commercial property in the next three years.
Irish banks were among the most profligate lenders that helped fuel the UK property boom. The UK is a focus for future forced sales, given the rebound in property values there.
Some of London's best-known buildings are backed by debt bought by Nama, including the Citigroup tower in Canary Wharf, which was recently put up for sale, as well as the Rothschild headquarters in the City, and Claridges hotel.
Nama is now one of the top property lenders in the UK after scooping up around €81bn of loans to property developers.
It is taking steps to take full control of prime sites in Leicester Square, Shoreditch and Canary Wharf.
The agency has appointed auction house Allsop as receivers on a Leicester Square site that includes the Odeon cinema on the south-western corner. They recently impressed Nama after raising €15m in Ireland's first repossession sale at the Shelbourne Hotel two weeks ago.
Last week, Nama moved on developer Ray Grehan, described as the "very embodiment of the Irish property boom and bust" by the London Independent.
Yesterday, it emerged that Nama is to give the developer more time to try and retain control of his operations. He has until the close of business on Tuesday to come up with a solution or Nama will seize control.
The one-time handyman came to fame by paying a massive €84m per acre for a site in Dublin's Ballsbridge, pitting him squarely against another developer, Sean Dunne, dubbed the Baron of Ballsbridge after he paid colossal sums for the Jurys and Berkeley hotels.
Mr Grehan developed a premier portfolio in London, including plans for a new tower next to Canary Wharf, designed by Lord Foster. The 67-storey-plus site on the old City Pride pub site is due to house 435 apartments and a 203-room hotel. Already, property developers are circling this site. Apart from the Lord Foster City Pride development, Mr Grehan's London portfolio includes an apartment block in Canary Wharf known as the Forge, the Crown Plaza Hotel in Shoreditch and a retail centre in Ealing.
Mr Grehan said he was "baffled" by Nama's move and said he was given "no warning" about the move to seize control of his developments.
Chris Ireland, head of investment at global property consultancy King Sturge, has said: "The issue with Nama and the UK banks is whether they flood the market with secondary stuff, and they all have loads of it."
Secondary property is taken to mean assets outside London. About a third of Nama stock is in the UK -- around €16bn in total.
The list of Irish acquisitions is impressive: Hamleys, Tiffany's, the style mile in Knightsbridge, at least a dozen tower blocks in London's Docklands, including the Pan Peninsula apartment blocks and Citigroup's HQ in Canary Wharf, large swathes of Oxford Street, the Goldman Sachs HQ on Fleet Street, Bow Street Magistrates Court, Claridges, the Berkeley and the Connaught Hotels.
Some of these have already been sold -- Claridges is now controlled by the Barclay Brothers, owners of the Ritz and the Telegraph.