Sunday 18 March 2018

Goodman gets green light for Baggot St makeover

Beef baron Larry Goodman stands to make a fortune - another one that is - from the former Bank of Ireland head office on Dublin's Baggot Street.
Beef baron Larry Goodman stands to make a fortune - another one that is - from the former Bank of Ireland head office on Dublin's Baggot Street.
Richard Curran

Richard Curran

Beef baron Larry Goodman stands to make a fortune - another one that is - from the former Bank of Ireland head office on Dublin's Baggot Street.

Goodman bought the 220,000 sq ft office block in 2012 for €40m. The refurbishment will cost around €70m.

His Remley Developments needed the go- ahead for the refurbishment from An Bord Pleanala because the building is a 20th century architectural masterpiece which is a protected structure.


I always thought it was a bit too stuffy any time I went in there for Bank of Ireland press conferences in the past. Then again, perhaps that didn't have much to do with the architecture.

Whatever about the interior, the façade was inspired by the style of the iconic 1958 Seagram building in New York. It was one of the first to have an open plaza out the front for staff to hang out and relax.

The Baggot Street building was designed in the 1960s by Ronald Tallon, who remained a director of architects Scott Tallon Walker for 55 years, until his death last year.

After refurbishment, the building would stand Goodman around €110m. The Comer brothers say they expect to get €45 to €55 per sq ft in rent at the former Vets College site in Ballsbridge when they are finished developing it.

A similar figure would see Goodman's Bank of Ireland building land around €11m per year in rent. At a yield of 6pc, it would be worth €183m.

That is a number worth preserving.

TSB backers' tongue-lashing

Permanent TSB's TV advertising campaign slogan is "Back to basics", and the bank's board certainly got a right dose of it at the AGM last week.

Shareholders launched a verbal assault from the floor on enormous interest rates being charged on variable rate mortgages.

One shareholder, Breda O'Byrne gave chairman Alan Cook and CEO Jeremy Masding a tongue-lashing. She rather eloquently summed her view as: "Permanent TSB my arse!"

It isn't quite what Messrs Cook and Masding were used to over at National Savings and Investments or Central Trust across the water. Cook is also a non-executive director of Sainsbury Bank, which knows a lot about charging very low interest rates.

Sainsbury Bank raised quite a few eyebrows recently when it started offering cut-price personal loans of up to stg£35,000 over five years for as little as 6.9pc. These are unsecured personal loans and compare very favourably with the 8.5pc to 11.5pc offered by some of its UK competitors.

Some PTSB mortgage holders, on fully secured 25-year mortgages, are being charged around 4.5pc.

The difference is that Sainsbury Bank makes about £60m per year and is rumoured to be considering a move into the mortgage market in the UK.

Cook went to great lengths last week to emphasise that PTSB can't reduce variable mortgage rates because the bank is still losing money - €48m last year in fact.

But Breda Byrne was like a knife cutting through butter when she analysed the mixed messages about the performance of PTSB. She told Masding, "you are telling us it's improving and the other fella [Cook] beside you is telling us it's a loss-making bank. "

A veteran of shareholder battles at Eircom, Ms Byrne showed deep understanding of bank balance sheets (and prowess at cutting to the chase) when she referred banks' flexibility in presenting financial performance by making adjustments to the provision figures for bad loans.

She might make an excellent board member.

State took a tawdry stand on Mueller pay

With the Government all set to back a €1.3bn takeover of Aer Lingus by IAG, the State does seem to have handled the pay packet of former chief executive Christoph Mueller in a rather tawdry way.

Mueller was paid €1.2m in 2014, his last full year in the job. His remuneration was opposed by the State, although it passed the AGM by a 0.0001 margin.

Mueller was well paid but he did a great job. In 2008 Aer Lingus earned €1.35bn in revenue with a staff cost of €334m (24.2pc). After several years of crisis, re-structuring and re-positioning, Aer Lingus generated revenues of €1.55bn last year with staff costs of €300m (19.3pc).

Mueller did much to steer the airline through an extraordinary storm and it has come out stronger. So much so, that the Government believed it was worth more than €1.3bn just a few weeks ago.

The Government's vote against Mueller's remuneration must have soured things for him - as no doubt Bertie Ahern's onslaught in the Dail against his predecessor Willie Walsh soured things for him.

Time does heal everything.

Bunfight may loom at NTR after US deal

Now that National Toll Roads (NTR) has bagged a mountain of cash from the sale of US wind farms, how much will Tom Roche be willing to pay to buy out shareholders who want to exit the company?

One51 and Nick Furlong's Pageant Holdings want to sell, but presumably not at any price. NTR has hired independent consultants to assess the value of the business.

However, it is understood that no binding agreement exists between shareholders to accept whatever valuation the independent advisers place on the company. Plus there are 2,000 small investors. This is where it could get really interesting with a possible shareholder bunfight.

National Toll Roads will receive €179m from last week's sale of two wind farms. It has another €41.3m coming from the sale of its Osage wind farm. It is owed around €18m from Greenstar North America.

At the end of December 2014, it had about €47m in cash but also has a tax liability.

Then there are the smaller assets, such as the €10m invested in European wind so far, €20m to €25m for its 50pc share of Celtic Anglian Water, another €15m owed from SES Solar. The list goes on.

Some sellers might argue National Toll Roads is worth €300m to €330m - or roughly €3.25 per share. What happens if Roche disagrees?

Sunday Indo Business

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