News Martina Devlin

Friday 19 September 2014

The developers are back in town, ready to rebuild their fortunes

Published 20/03/2014 | 02:30

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Bernard McNamara: discharged from bankruptcy
Bernard McNamara: discharged from bankruptcy

The boys are back in town – listen to them rev up. Developers whose names are synonymous with the splurgerama of the boom-to-bust era are putting pedal to metal again, property deals in their sights.

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It's as if the past six years never happened.

Now that the message has gone out about Ireland Inc being open for business, the Usual Suspects Gang is firing on all cylinders to share in the recovery. Some are already on the property scene again and eyeing up bargains.

You could almost admire their selective memories and elephant hides. Almost. But not quite. Their knack for forgetting they were a key factor in the crash. Perhaps we might have let it slip our minds, too, if the collateral damage left in their wake wasn't so enormous and the Irish public wasn't condemned to shoulder the consequences.

Now, here they are again, still in one piece. Extricated from the wreckage and back on the deal-making circuit. The developer class is sniffing the air for opportunities. Leaving the past – the very recent past – behind.

Earlier this month, Bernard McNamara was discharged from his €1.2bn bankruptcy after a UK quickie – he moved to London in 2011 to establish England as his centre of main interests. His property portfolio included the Burlington Hotel, he was part-owner of the Shelbourne Hotel and he was part of a consortium which paid €412m for the former Irish Glass Bottle site.

Johnny Ronan of the property development company Treasury Holdings is preparing to re-enter the market at the high-risk, high-reward end. He is said to be close to raising €250m to fund a comeback. Some €1.7bn of debts from the collapsed global property empire he co-founded with Richard Barrett ended up in NAMA, with assets currently being sold off piecemeal.

A whiff of boomtime nostalgia was generated this week when Ballymore Properties founder Sean Mulryan hosted an eighth birthday party for his Kildare shopping complex, with Cheltenham stars on the invitation list. Guests from the worlds of politics, business and sport, including jockey Ruby Walsh, joined the celebrations at Newbridge's WhiteWater Shopping Centre.

Don't you miss that Celtic Tiger glitz at the interface between property and celebrity? Me neither.

The overwhelming majority of Irish property developers misread the boom.

They were not the only people to blunder, but they made costly mistakes. Expensive for them, expensive for the Irish people.

Daily, we find ourselves paying for their errors through the grossly unfair Universal Social Charge, as well as other new taxes pummelling us, as well as with reduced services. Some developers, such as Ronan and Mulryan, are working with NAMA to pay down debt. Nevertheless, one way or another, the excesses of the developer class have left everyone poorer.

These people were supposed to be the experts but they called the market wrong in spectacular fashion. And while many of them survived the wipeout, other parties haven't been so lucky.

Small suppliers were obliterated, their businesses going to the wall when banks squeezed developers to repay their borrowings. As for homeowners who bought at inflated prices – they were left high and dry. The toll of human misery over the past six years has been steep.

EVEN as we observe the developer class shake itself free, ordinary people remain entangled in nets woven by the avarice and overweening ambition of others.

Right now, the developer class is intent on a Lazarus impersonation. Never mind that others remain stifled by the dead hand of the financial disaster which developers helped to call up. The owners of those 100,000 residential properties in arrears, for example – debt write-downs are happening at a snail-like pace for them.

But back to that birthday party for Mr Mulryan's shopping centre. Ballymore, incidentally, expects to be free of NAMA by 2015. A press statement on his behalf quotes the developer: "I like to think of WhiteWater Shopping Centre as an integral part of the heart and soul of Co Kildare along with the county's thoroughbreds, and its array of great sports stars."

A shopping centre is undoubtedly convenient. But integral? To anything? I think not. Besides, that 'I shop therefore I am' attitude of the Tiger years was thoroughly discredited, not least because of credit card debt. Mr Mulryan's self-serving attempt to link shopping with horseracing as a defining Irish characteristic would be laughable if it weren't so distasteful. Who benefits from such a spurious connection? Not the Irish people, that much is certain.

We can expect to hear a lot about developers creating jobs as they drum up deals. And indeed, some will spearhead projects leading to employment in construction, retail, hotel and other sectors.

Undeniably, developers are necessary in a functioning economy. But must it be the same people as before, with the same attachment to consumerism and the celebrity culture? Haven't we had a bellyful of pretension?

Every developer isn't a Flash Harry, but there were enough swaggerers to give the breed a bad name. Many of them swimming without trunks, to misquote Warren Buffett. And now ready to dive back in.

They may have forgotten the buck stopped, not with them, but with taxpayers. But we shouldn't.

Irish Independent

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