I Could Have Been A Contender: 7 Deals Where Irish Banks And Investors Lost Out On Big Profits
The decision making of those put in charge of recouping money for Irish taxpayers from property lending was thrown into relief again last month with news that Battersea Power Station, once Irish-owned, has shot up hugely in value.
Here are seven instances where Irish banks, investors and indeed the Irish state, through bodies like Nama and IBRC, lost out as firms made big profits when flipping assets they bought.
1. Battersea Power Station
Battersea power station was sold by Nama for €600M in 2012 and was sold again earlier this year for €1.8B.
Originally owned by Richard Barret and Johnny Ronan of Treasury Holdings, Nama took over the loans linked to the property in 2011.
In January, Malaysian state pension manager Permodalan Nasional Berhad and private sector pension manager Employees Provident Fund of Malaysia bought a stake in the project from Malaysian developers Sime Darby Property and SP Setia.
A lot has changed in the intervening period, not least Apple agreeing to lease almost the entirety of the 500K SF office element of the scheme.
2. Jurys Inn Group
Originally established by the Jury’s Doyle company in Ireland as a lower-cost alternative to their four and five star hotels it was sold for €1.166B to a consortium assembled by financier Derek Quinlan.
In 2013, a write-off of €327M of its debts was agreed with its banks, including the Irish Bank Resolution Corp., AIB and Ulster Bank. That represented a 50% haircut for the Irish banks on their loans.
Following this U.S. firm Lone Star bought the chain for €768M in 2015 before selling it to Swedish investor Pandox for €903M in 2017.
3. Lone Star and Starwood make hay in Dublin
Two U.S. private equity firms have made a big killing on the same portfolio of Dublin offices.
Nama sold a portfolio of four office buildings previously owned by Sean Reilly to Lone Star in 2014 for €220M — the Iveagh Court complex, the Watermarque building, Marsh House and Nos. 11-12 Hogan Place.
Little more than a year later Lone Star sold the portfolio to Starwood for €350M. And last year Starwood said it had rebuffed offers for the portfolio which represented a significant uplift on what it paid.
4. Diagonal Mar Shopping Centre, Spain
In 2006 the Irish investment group Avestus bought the Diagonal Mar shopping centre from Deka Bank for €300M. When the debt needed to be refinanced U.S. fund Northwood Investors snapped the asset up for €150M in 2015, about the same level as the value of the loan, and was subsequently sold to Deutsche Bank for €495M in 2016.
5. Louis Vuitton Store, New Bond Street, London
The chief executive of luxury goods company Louis Vuitton Möet Hennessy, Bernard Arnault, bought the Louis Vuitton store plus two other stores on London's Bond Street in 2011 for €358M.
Nama prompted owner David Daly to sell — he owed the agency about €450M. Since the end of 2011 values on Bond Street have risen by 30% to 50%, according to data from BNP Paribas Real Estate.
6. 1 Central Quay
Another of the most profitable deals in Dublin saw Blackstone cash in on a pair of office buildings.
Hibernia REIT bought the 57,700 SF office space for €51.3M in 2016 from Blackstone Capital.
Blackstone bought the Central Quay property from Nama with the Bloodstone building for €80M, and put them on the market together for €120M.
Bloodstone was bought for around €70M by Real Is on behalf of a German fund.
The buildings were originally developed in 2005 by developer Sean Dunne.
7. Victoria Hall
One of Blackstone's biggest profits when it came to Ireland was the sale of the Victoria Hall student accommodation business.
Blackstone bought the business when it acquired the loans Irish developer Michael O'Flynn from Nama for €1.1B in 2014. The portfolio was valued at €266M according to loan documents, but Blackstone subsequently sold it for €519M to Canada Pension Plan Investment Board in December 2016.