Tuesday 12 December 2017

Property developer O'Reilly tells inquiry he hopes to pay back €2bn worth of loans

Developer Joe O’Reilly, centre, arriving at Leinster House yesterday. Photo: Steve Humphreys
Developer Joe O’Reilly, centre, arriving at Leinster House yesterday. Photo: Steve Humphreys

Clodagh Sheehy

Property developer Joe O'Reilly said he hoped to pay back €2bn worth of loans in full.

Mr O'Reilly, who was responsible for some of the biggest developments in Dublin, said his companies, Castlethorn Construction and Chartered Land, had so far paid €600m to Nama and he expected to pay back the principal on personal and corporate borrowings in full.

Questioned by Deputy Michael McGrath, he said the €600m was made up of €400m actual asset repayment and €200m-€250m in rental cash flow for Nama from properties.

Developments by Mr O'Reilly's firms include Grand Canal Square, the Facebook European headquarters in Dublin, the Bord Gáis Energy Theatre, the Dundrum Town Centre, ILAC Centre and Pavilions shopping centre in Swords, Co Dublin.

Mr O'Reilly said that the borrowings of the two companies amounted to €2bn by September 30, 2008. Castlethorn was primarily financed by Ulster Bank and AIB, and Chartered Land by Anglo Irish Bank and Bank of Ireland.

The developer blamed the crash on too much debt being too freely available to too many borrowers, which led to a glut of inexperienced developers, many of whom traded with a short-term horizon.

"This caused an unsustainable peak in the values of virtually all property segments and particularly in secondary properties in provincial areas," he said.

Mr O'Reilly referred to the significant number of new developers "who lacked experience and expertise, many of whom were over-exposed to over-priced secondary assets".

He said many people who became developers seemed to be able to get loans overnight.

Asked by Deputy Seán Barrett about donations to political parties, Mr O'Reilly said his firms gave €74,000 in political donations to the main political parties and some independent politicians in 2002-2008. He said they had always been asked for the contributions and "did so in small amounts when asked".

Irish Independent

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