Exotic islands project not so sunny
A luxury development off the coast of west Africa, once plugged by financial guru Eddie Hobbs, is at the centre of a multi-million legal wrangle
THE controversial property deals on the Cape Verde islands off the coast of Senegal in Africa have unsurprisingly reached court.
One development on the island led by Thomas Sheehy of Clonakilty, Co Cork, has been the subject of heated debate. The destination came to widespread public attention after being mentioned by Eddie Hobbs on Tubridy Tonight in 2006 when he was warning about investing in Bulgarian holiday homes.
At the time Hobbs had been asked by the developers to speak at some of their open events around the country and he also had information about the developments on his website. Now architect Brian Murphy-O'Connor and businessman Ted Whitaker are suing Sheehy, who the court was told is in Portugal, and another businessman John Cahillane in the Commercial Court, claiming they are owed €8.5m under a previous High Court agreement.
HUNDREDS of other people invested in Cape Verde property at the height of the boom.
The first phase of the Paradise Beach project on the Cape Verde Islands was due for completion in April. But a dispute with the project's contractors has led to a delay and it is now said that completion will be in late 2010.
According to the most recent accounts for gotocapeverde there was a deficit of €4.5m in shareholders' funds for the year ended September 2007 and had accounts owed to clients of €3.3m. However, the UK estate agent somewhat implausibly insists this is one part of the world ("along with Dubai") where prices are still rising. "There is some infrastructure there now and the airport has been expanded," he claims.
The development quotes €176,000 for a two-bed in Paradise Beach and €139,000 for a one-bed. But some are still on the market for €204,000 and more. Last November, a Cork developer offered a free apartment in Cape Verde as a sweetener for anyone buying a family home in Cork, quoting €70,000 for their value.
EDDIE HOBBS may have been making the distinction between Cape Verde and Bulgarian property but the latter has now imploded with many half-finished developments in the ski resort of Bansko and elsewhere as buyers fail to come up with the balance of the funds and developers go bankrupt.
According to Forbes most of the 120 estate agents in the town have closed and many "half-finished apartment blocks stand as shells with unfinished concrete block walls and metal reinforcing rods sticking up in the air".
Investors who are lucky enough to have a finished apartment are selling for around €500 per sq m compared with €1,000 a sq m one year ago, and some are reportedly being bought by investment funds who can wait for buyers to return.
Bulgarian authorities are thinking about buying some and bulldozing to make green space. How long before the Irish Government comes to a similar conclusion for half finished estates in scenic areas?
SANDYMOUNT, one of the nicer places to live in Dublin, has seen prices tumble by over 50 per cent since 2006, particularly around St Alban's Park, a cul de sac off Sydney Parade Avenue once home to disgraced solicitor Michael Lynn.
In 2006 at the height of the boom, No 82 was sold by Gunne for €2.5m. Now there are three homes on the road for sale and one, No 27, has just dropped to below €1m, down from €1.25m in February, having sold for €1.18 in 2004. Lynn dropped the price of his home at No 20 in February from €1.85m to €1.2m -- but still no-one has bitten.
He borrowed €2.5m from two banks to buy the property and Ulster Bank has been granted permission to sell the house but it must share the proceeds with Bank of Scotland while AIB also has a charge. There is also a large garden house, with wall safe. On the corner, No 30 is also up for sale for €1.25m.