Friday 23 March 2018

Massive range of assets adds up to €30.5bn headache

The Louis Vuitton store on Bond Street, London
The Louis Vuitton store on Bond Street, London
Up for grabs: Unoccupied houses at Daar River Walk, Newcastle West
Smithfield, Dublin 7

QUARRIES, agricultural land, car parks and suburban development land are among the assets to which NAMA has appointed receivers in the hope of working out problem loans within its €30.5bn book.

But trying to actually get them off the books will prove to be one of the agency's biggest challenges.

Sandyford in south Dublin epitomises how the value of development land has collapsed in Ireland.

Land there was worth €20m an acre at the top of the boom, as the arrival of the Luas led developers to believe there would be a demand for thousands of apartments.

Now, depending on location, it is worth €500,000 to €1m an acre, a land expert said last night, a fall of at least 95pc.

The Fleming Group, for example, paid about €165m for an eight-acre site beside the Luas line there.

That site became Rockbrook, a development of apartments and retail units that was under construction when the bubble burst and which forms part of the list of assets on NAMA's website.

NAMA has appointed Farrell Grant Sparks as receiver to the property, while John Fleming, who founded Fleming Group and which has debts of about €1bn, moved to the UK in order to be declared bankrupt. He is due to emerge from that bankruptcy on November 10.

Just up the road is Beacon South Quarter, an apartment and shopping complex developed by Paddy Shovlin and Tony and Patrick Fitzpatrick.

NAMA secured judgment orders against the trio last year in relation to a €280m loan from Bank of Ireland for that complex, although there was no recourse on 95pc of the debt from the bank.

Some of the development has yet to commence, meaning it could be years before NAMA finds a buyer for that part of the scheme, given the oversupply of housing, offices and shops in the area.

Outside of Dublin, the picture is even bleaker.

Development land in Belturbet in Cavan, Ennis, Tralee and Letterkenny among others will show a discount of more than 90pc, with one source saying land in parts of Meath could have been written down by 95pc or more when it was acquired by NAMA. For those who bought that land, there is unlikely to be any way back.

There are some domestic positives for NAMA.

Bernard McNamara's retail units on Grafton Street are on the list of securities for sale which should eventually attract foreign investors, while a brave soul might be interested in some of the blocks acquired for a possible shopping centre next to the Westbury Hotel, which Mr McNamara was involved in assembling.


They're dubbed "certain assets of Westbury Mall" and retail on Clarendon Street on NAMA's list. There's also likely to be demand for some of the houses around Dublin's leafy suburbs which were owned by Derek Quinlan, albeit at prices substantially less than what he paid for them.

NAMA boss Brendan McDonagh also confirmed last night that there had been a number of expressions of interest in the office block on North Wall Quay which was earmarked as the new headquarters of Anglo Irish Bank. That was being developed by Liam Carroll before his empire collapsed.

There is also likely to be interest from US companies in the office element of the Vet College site in Ballsbridge, which was to be developed by Ray Grehan before receivers were appointed by NAMA.

But it is in Britain where NAMA has its best chance of making a profit, specifically in London.

Included in these are David Daly's Louis Vuitton shop on New Bond Street, the value of which has soared in the last two years, and Ray Grehan's Hotel St Gregory in Shoreditch and his City Pride site in Canary Wharf on the River Thames where a skyscraper development is planned.

For all of that there are a number of assets that will prove more difficult to shift, including a car park in Wales, a large number of pubs, and residential land in the north of England. Demand for them will be limited at best.

The sheer variety of the assets is also very striking.

Two trophy homes in salubrious Ballsbridge, Dublin 4 -- on Ailesbury Road and Elgin Road -- have also been taken on by the agency's receivers, the details reveal.

Several properties seized in and around Grafton Street show it would be difficult to negotiate one of the country's busiest shopping areas without passing a building under the control of the agency.

Other treasured addresses in the capital include offices and retail premises on St Stephen's Green, College Green, Merrion Square and Fitzwilliam Square.

For those looking for more unusual purchases at knock-down prices, there is marshland at Booterstown, south Co Dublin, on the list, a historical abbey building at Rathfarnham and a boat house in Cobh, Co Cork.

A movie theatre on Leicester Square in central London, a hotel in the city's Shoreditch district, a marina and holiday homes on the Isle of Wight, a shopping centre in Bangor, Wales, and dozens of pubs across the UK are also on the Nama books.

There are also creches in counties Limerick and Louth, a nursing home in Co Donegal, a medical centre and gym in Smithfield, Dublin, the Longford shopping centre and the M1 Retail Park in Drogheda, Co Louth.

Much of the list is residential and development sites -- with construction not getting off the ground in many cases -- around the country, but heavily focused on Dublin, Cork and Limerick.

NAMA chief executive Brendan McDonagh said the majority of the properties were on the market and that they were working with debtors to get the remainder of the assets up for sale.

Irish Independent

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