ANALYSIS: The financier Mr Dermot Desmond has bought into Real Estate Opportunities plc (REO), a number of sources said yesterday in Jersey. The shareholding is believed to be quite small, writes Colm Keena in Jersey

The entry of Mr Desmond onto the company's registry of shareholders means that he is again linked to a property company in which the solicitor and property developer, Mr Noel Smyth, is also involved. Mr Smyth and Mr Desmond were both shareholders in Dunloe Ewart two years ago when there was a battle royal over control of that company.

REO holds the largest Irish property portfolio of any listed property company. The REO annual report for 2003 says the company's Irish property portfolio was worth €506 million at year's end. The UK and other properties held by REO were worth £107 million (€159.5 million).

Properties owned by REO in Ireland include: Marks & Spencer, Merchant's Quay, Cork; 40- 42, Mespil Road, Dublin; the Baggot Building, Baggot Street, Dublin; Blocks A to D, Russell Court, Dublin; the Tedcastle site on Dublin's North Wall Quay; and lands at Clondalkin.

Each of these is considered to be worth more than £10 million each. There are many other lesser Irish properties listed, including lands at Kinsealy, Co Dublin.

The company also has an interest in other properties in Ireland by way of Havenview Investments Ltd, a joint venture company owned 50/50 by REO and Treasury Holdings Ltd.

Yesterday's meeting heard that Havenview is the development end of REO's Irish property interests. Properties in the Havenview portfolio include; Central Park, Leopardstown, Dublin 18; 43-49 Mespil Road, Dublin 4; and Ballymun Shopping Centre, Dublin 11. Those three are considered to be worth more than £10 million each. Havenview has 50 per cent of Central Park.

Despite reporting a profit of £31.5 million before tax, REO paid no dividend in 2003.

A substantial rump of the company's shareholders are concerned about the fees being paid by REO to Treasury for its work in managing the Irish REO portfolio and for development work.

Furthermore, they feel that not enough is being done to identify who lies behind Calyx, an Isle of Man company that holds an 8.37 per cent shareholding in REO and which normally votes with the board.

There were also concerns expressed yesterday about the fact that approximately five million REO shares, or just under 3 per cent of the company, were bought from a trust linked to the chairman, Mr Ray Horney, some months ago, by an unnamed investor who seemingly paid significantly over the odds for them.

Mr Guy Naggar, chairman of London-based Dawnay Day, which owns 26.5 per cent of REO, according to its 2003 annual report, said the shares were bought from the trust for 75p each when they were available from the stock market for 45p.

Mr Horney said the shares were bought from a trust of which he was a beneficiary. Given the offer there was very little choice for the trust but to sell the shares.