Quinlan plan to sell Citigroup Tower hits tax snag
PLANS by developer Derek Quinlan to sell the 40-storey Citigroup Tower in London's Canary Wharf -- at the insistence of NAMA -- are reported to have run into trouble. Buyers are shying away over concerns about an outstanding tax bill.
Mr Quinlan is selling the property along with his co-owner Glen Maud, a UK property investor, who has combined on other projects with the Irishman.
Citigroup Tower used to be the most expensive building in London, but the crash in the market has forced Mr Quinlan, a former tax inspector, to reduce his debts rapidly by working with NAMA and several commercial banks.
But 'Property Week' magazine yesterday reported that interest in the Citigroup asset was now dwindling.
Two companies owned by Mr Maud and Mr Quinlan borrowed about £875m (€1bn) to purchase the building, but the UK magazine claimed that a tax bill of £182m (€210m) would need to be paid if the leasehold on the property was to be acquired.
However, there has been interest in the building from Legal & General and China Investment Corporation, reports suggest.
The building is in a so-called enterprise zone in the Canary Wharf, which means that tax liabilities arise if the property is sold.
Mr Maud and Mr Quinlan are reported to have taken legal advice on whether a sale would trigger this liability.
The original deal was backed by lenders Santander and AIB, with NAMA taking over the lona from the Irish lender.
It is understood that NAMA paid a steep discount on the loan and had hoped for a substantial profit.
Meanwhile, NAMA has sold a cinema site in Tunbridge Wells for about £10m (€11.5m) to New York private equity group Carlyle and a UK partner.