Friday 24 November 2017

Irish investors' distressed properties in major UK sale

Donal O'Donovan

Donal O'Donovan

Distressed assets of Irish investors worth €300m are to hit the UK market shortly.

Receivers plan to launch the sale of Alburn Real Estate Capital, developer Noel Smyth's €147m UK property empire, within weeks, the Irish Independent has learned.

It comes as 15 Westferry Circus, Brian and Mary Patricia O'Donnell's trophy London property, has been put on the block by its receiver with a £130m (€162m) price tag.

Sales of commercial property by distressed Irish investors are now a mainstay of the British market.

The Alburn portfolio is being readied for sale after Mr Smyth lost control of the UK portfolio in May. Senior lenders owed £200m (€250m) voted to appoint receivers from Savills and administrators from Moorfields to take control of the portfolio when their debts fell due without being repaid.

The Alburn portfolio is made up of 45 properties scattered across the UK, including Project House on London's Tottenham Court Road. The portfolio is a mix of office blocks and industrial and retail units.

Receivers were appointed after Mr Smyth's Jersey-registered investment company failed to repay or restructure £200m (€250m) of debt.

The debt is secured on the property empire through a complex lending facility with a number of "layers" of creditors.

Last week a threatened legal battle between creditors was resolved out of court, clearing the way for the latest sale plans.

The battle was between so-called junior lender Pearsanta -- which wanted to appoint its own nominees to manage the enforcement action despite it being last in the queue to be repaid -- and more senior bond- holders.

The settlement clears the way for agents already approved by the senior lenders to carry on with a liquidation.

Enforcement

Mr Smyth's company, as the original borrower, has also signed a separate agreement to co-operate fully with the enforcement action and the sell-off of the properties.

Rather than attempt to sell the portfolio either as a single unit or one at a time, the receivers plan to break the 45-strong portfolio into a number of lots that will be targeted at different investor types before bringing them to the market.

Meanwhile, Savills is also the receiver of Brian and Mary Patricia O'Donnell's London trophy property at 15 Westferry Circus, in London's Canary Wharf.

It has now been put on the market with a £129.5m (€162m) price tag, close to the £134.7m price paid by the O'Donnells' Vico Capital for the office block in 2006. Receivers were appointed over the summer after plans to sell the property to repay debts fell through.

Savills said the price being guided would offer any buyer a 6pc yield on the property which has sitting tenants, including US investment bank Morgan Stanley. It signed a 35-year lease in 2002 at an annual rent of £8.2m.

Noel Smyth: receivers appointed to his company

Irish Independent

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