Subsidiary buys back investments funded by bank

A NEW company set up by the Ulster Bank to handle distressed property assets has surprised the property market by buying in two Dublin office blocks which the bank originally funded but which ended up in receivership.

Ulster Bank’s low-key subsidiary West Register has emerged as the successful bidder for McConnell House, overlooking the Grand Canal at Charlemont Place, Dublin 2, as well as the Audi Centre which is situated opposite the former Jury’s Hotel in Ballsbridge, Dublin 4.

Developers Bernard McNamara and Gerry O’Reilly bought the two buildings at the height of the property boom, spending €10 million on the Ballsbridge building and €8 million on the second block.

Plans to redevelop both properties were abandoned when the market crashed.

About 12 months ago, Ulster Bank nominated Declan McDonald of PwC as receiver to Grattenlane, the company controlled by the two developers.

James Meagher of agent HT Meagher O’Reilly originally sought €3.25 million for McConnell House and though several bidders emerged none of them were prepared to offer anything close to the asking price.

At the end of the day West Register moved in with a bid of slightly over €2 million which was accepted by the receiver.

The Audi Centre was also knocked down to West Register at around €4 million – €1 million below the asking price.

West Register is now expected to maximise the value of both sites by seeking planning permission for larger office buildings.

The five-storey McConnell House has been unoccupied for a number of years and has an overall floor area of 1,650sq m (17,760sq ft) as well as 20 car-parking spaces on the ground floor.

It is separated by the Luas line from O’Reilly’s Hilton Hotel overlooking the Grand Canal at Charlemont Place.

Two years ago, McNamara and O’Reilly got planning approval from An Bord Pleanála for a substantial development of offices, cafe, hotel extension and conference facility involving the Hilton Hotel and McConnell House.

The plan was to have included the demolition of McConnell House and its replacement by an eight-storey building with 6,719sq m (72,323sq ft) of offices and a cafe on the ground floor.

The Audi Centre was extensively remodelled and fitted out by the motor company before it took out a 10-year lease from 2009.

The current rent is €376,000 per annum.