Business World

Tuesday 24 October 2017

Legal wrangle in UK threatens IBRC's shopping mall stake

Donal O'Donovan

Donal O'Donovan

IBRC, the former Anglo Irish Bank, has become embroiled in one of the UK's biggest and most intractable property battles -- thanks to a stake in a London shopping centre.

The increasingly bitter dispute over Croydon's Whitgift Shopping Centre could mean that the Irish taxpayer-owned bank's stake in a proposed €1.25bn redevelopment will be compulsorily bought by local authorities.

The battle is over the rights to complete a refurbishment of the UK's third-biggest shopping centre.

The crisis at the development has escalated to the stage where authorities could be forced to issue a compulsory purchase order to buy out one or more of the part owners in the deal, if the situation is not resolved.

The Irish Bank Resolution Corporation (IBRC) is one of three owners of the leasehold to Whitgift Shopping Centre, alongside co-investor Royal London Assurance and the Whitgift Foundation, a charity that owns the freehold to the site as well as a 25pc interest in the leasehold to the development.

The owners have fallen out over the awarding of the development rights for the site.

Last November, Australian retail giant Westfield Group said it had secured a binding agreement with the Whitgift Foundation to develop the site.

However, IBRC and Royal London Asset Management -- which together control 75pc of the leasehold -- signed up rival developer Hammerson as the preferred developer.

Deadlock

Hammerson, IBRC and Royal London say their preferred bidder was appointed following a transparent tender process.

Westfield Group and Hammerson are among the biggest developers in the UK property market and the battle between the two for control of the Whitgift is increasingly being played out in the UK media in an effort to appeal to popular and political support for each side.

However, the row between the owners is the real core of the dispute -- with no signs of it being resolved.

IBRC has been involved in the deal since 2005, when the then Anglo Irish Bank Assurance invested in a £225m (€280m) purchase of the leasehold to the site -- backed by loans from Anglo's lending arm.

With no sign of a compromise, the situation has become a political hot potato, attracting the interest of London's colourful major Boris Johnson.

It has been suggested that Mr Johnson could use his planning powers as a lever in getting either Westfield or Hammerson to withdraw from the Croydon situation.

Last night, sources confirmed that drastic measures could be taken to break the deadlock -- which could include issuing compulsory purchase orders to buy out either Whitgift or the IBRC/Royal London.

If this happens, the purchase price would have to reflect the market value, sources said, though it would be of the undeveloped centre.

Irish Independent

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