The Citigroup tower has been put up for sale with a £1bn price tag by cash-strapped Irish developer, Derek Quinlan.Ireland's "bad bank", the National Asset Management Agency (Nama), is to ditch all its London property by 2013 in what could be the biggest ever fire sale of trophy buildings in the UK capital.
It will sell or refinance the entire portfolio of properties it controls after being charged with getting rid of the debt mountain amassed by developers during Ireland's disastrous property boom. Among the buildings set for disposal or for refinancing are the Citigroup Tower in Canary Wharf, the Louis Vuitton shop on Bond Street and the landmark 23 Savile Row office block in Mayfair.
With some €19bn (£16.5bn) in its charge, Nama is now one of the key property owners in London with assets throughout the city. Its property portfolio includes the Odeon Cinema site in Leicester Square, the Crowne Plaza Hotel in Shoreditch, a shopping centre in Ealing and at least half a dozen blocks of flats in Docklands.
Graham Emmett, head of lending and corporate finance at the agency, told Property Week: "The UK is a more liquid real estate market structurally than Ireland and, with 27% of the loan portfolio here, this is where we can achieve our near-term aim of repaying 25% of the Nama bonds by 2013. Thus we plan to try and exit the UK exposures in the next two to three years, through borrower-led asset sales and refinancing."
The trade paper described the development as "one of the most dramatic sales the market has ever seen".
The decision to quit London is a U-turn for the agency, which hitherto indicated it would hold on to London properties and go for an orderly sale over seven to 10 years to benefit from the rising market. The agency's chief executive, Brendan McDonagh, said last month it would seek to dispose of just 25% of its UK portfolio by 2013.
But the leading commercial property firm DTZ said Nama was making a wise move amid fears that the value of its Irish portfolio, down by 50% in places, could be battered even further.
"You've got to remember Nama has a duty to the taxpayer and it has to get a return. There has been a lot of uncertainty over the last two or three years and I think they've said quite rightly, let's get on with it and get some loot in. Their view is the UK market is strong," he said. There is a drought of good quality property in the market and NAMA would do well, he said.
Fergus Keane, head of West End investment at DTZ, said: "There's no such thing as a fire sale in London, nothing's cheap. The story isn't everything must go, but everything will go and at top price."
Nama bought the properties at a discounted price of about €9bn and has recouped €3.3bn from sale or refinancing deals that include Claridge's hotel and Battersea power station which was refinanced this month in a debt-for-equity swap. Much of the property was bought on the back of cheap credit from Irish banks, and now the property developers and investors who once enjoyed a high life of private jets, helicopters and second, third and fourth homes are under pressure.
Nama refuses to specify which properties it has but it is understood that the owner of the block housing Louis Vuitton is David Daly, a low-profile Dublin developer. David Daly. David Arnold, another Dubliner, has also had his business, D2 Private, absorbed into Nama. It is behind four prize London assets including 23 Savile Row, Paddington Waterside, Woolgate Exchange in the East End and 12 St James's Square.
The developer who took the most spectacular fall is the tax inspector turned property investor Derek Quinlan. He was forced to sell the "style mile" of shop space between Harrods and Harvey Nichols in Knightsbridge, which houses several top fashion chains. Elsewhere, he has also been forced to put his Citigroup tower in Canary Wharf up for sale with a £1bn price tag . Another high-profile Nama developer is Ray Grehan, who this month saw his London portfolio put into administration. The for-sale sign will go up on his assets, which include the 196-bed Crowne Plaza hotel in Shoreditch and two developments in the Docklands including a 128-flat block called the Forge in Canary Wharf and a proposed 62-storey residential and hotel tower, designed by Foster & Partners on the site of the City Pride pub near South Quay. Another property owned by Grehanis Ealing Arcadia, a retail park in Ealing Broadway.
Others that will be affected are Ballymore, which has about 60 sites around the capital, with half a dozen residential towers in Docklands including Pan Peninsula and Baltimore Wharf. It has recently sold £350m worth of land to reduce debt and is believed to have more than £500m in Nama. It has agreed with Nama to cut its borrowings through debt for equity deals. Also > Mortgage Refinance Online Reviews
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