Monday 20 November 2017

Irish projects escape in London and Berlin

While the signs are promising for firms behind landmark developments in the British and German capitals, they are not looking so good elsewhere

APPROACHES: A number of banks have expressed interest in Ulick McEvaddy's Berlin project.
APPROACHES: A number of banks have expressed interest in Ulick McEvaddy's Berlin project.

GERMAN pension funds and a number of foreign banks have recently sought to back Irish developers who are spearheading landmark projects there, the Sunday Independent has learned.

The news is the latest sign that while developers with projects there and in London may emerge successfully from the wreckage of the property crash, the futures of those who pursued large projects elsewhere are much more uncertain.

Deutsche Bank, Bayern LB Bank and Belgium's KBC Bank are among those who have approached Omega Air co-founder Ulick McEvaddy in recent months. He is building a €700m hotel, conference centre and logistics development beside a new airport in Berlin.

Various unnamed German banks have also been approaching Sean Mulryan's Ballymore Group over the past few months. The firm has been able to forge new links with banks outside Ireland with which they had no previous business relationship, a company source revealed.

Large pension funds in Germany have also been looking for a piece of the action, seeking equity stakes in the company's €250m Kudamm Karee development, which is located in the centre of Berlin's busiest shopping street.

Architect David Chipperfield -- who previously worked on the rebuilding of the German capital's Neues Museum -- will design the mixed-use development, which will comprise 93,000sqm of office, retail, leisure and residential space on a two-hectare site.

Last week, the company submitted a planning application outlining proposals for the site and will work through them next year, aiming to receive a building permit so that work can commence in 2012.

McEvaddy's project is proceeding at a similarly steady pace. "The roads and the infrastructure are in, but we're still two years away from signing up tenants, so we're still aiming for completion in 2012," Mr McEvaddy said.

In London, meanwhile, it emerged last week that lenders who are owed €170m by Treasury Holdings' subsidiary Real Estate Opportunities (REO) agreed to allow the firm to suspend interest and debt repayments due on debt related to its Battersea Power Station plans until May of next year.

Treasury is in ongoing discussions with Nama and it is understood that if the firm receives planning permission for its development at Battersea, it would radically alter the company's prospects.

While Ballymore's discussions with Nama are also ongoing, the British capital may also be its saving grace. Some 85 per cent of its business is now there and it claims it has a better portfolio than any other developer in London.

Having retained a large landbank near the site of the new US embassy in London, which it will be helping to develop, the firm is also seeing steady sales at its Pan Peninsula complex beside Canary Wharf.

Keen buyers are being lured in, thanks to the weak pound and there is also a waiting list for apartments that come up for rent.

While London and Berlin have left the above developers in relative health, the future is looking far more uncertain for Shelbourne Development's Garrett Kelleher.

Although Anglo Irish Bank declined to comment, it did not deny reports last week that it has filed a $77m lawsuit against Kelleher in the US after his firm allegedly defaulted on loans that matured a year ago.

According to reports, the loans related to work on the site overlooking Lake Michigan in Chicago where the 2,000ft Spire apartment building designed by Santiago Calatrava was to be built.

The development stalled shortly after initial works on the foundations got under way, so a massive hole in the ground now remains.

Treasury Holdings is also no stranger to stalled overseas projects. One of its largest ever projects, an eco city in Shanghai, has yet to receive government approval.

Uncertainty remains, meanwhile, over an $800m retail, park and apartment development in Sullivan Square, Las Vegas that was due to be built by Harcourt Developments, the property firm fronted by Pat Doherty.

In 2008, Harcourt's joint venture partner, Glen, Smith and Glen (GSG) Development, sued it for breach of contract over the project, which was to include shops, offices, a park and 1,300 apartments within a 16.5-acre community.

Neither Harcourt Developments nor GSG Development returned calls or emails to comment on the fate of the project last night.

While the bets of other developers look much safer, perhaps it was a gamble that didn't pay off.

Sunday Independent

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