IRELAND’S TOP property developers are continuing to cash in on London’s resurgent property market, with Cork developer Owen O’Callaghan set to be the latest to bank a multi-million euro profit following the sale of a Mayfair office block for £48.1 million (€58.4 million).
Mr O’Callaghan, who has been a prominent critic of the National Asset Management Agency (Nama), is expected to pocket more than £15 million from the transaction after the seven-storey building at 18-20 Grafton Street, which is located close to Bond Street, fetched £3.1 million over the asking price. The timely income boost follows the disposal last February of another Mayfair office block, known as Charlotte House, which Mr O’Callaghan sold for £15 million.
The developer was unavailable for comment on either deal.
Although Mr O’Callaghan is one of the country’s biggest developers, his loans are unlikely to be transferred into the toxic loans agency until later this year.
It is understood Nama will maintain a claim over the personal assets of developers who are unable or unwilling to repay their borrowings.
Records filed at the UK Land Registry show the developer owned the Grafton Street building, titled Fitzroy House, through a special purpose vehicle called Rockboro Properties, which is registered in the British Virgin Islands. Allied Irish Banks financed the acquisition. It is not clear whether AIB also gave Mr O’Callaghan a development loan.
Fitzroy House was completed in May 2006. It is understood its sale to the international property fund, Primerica, delivered a yield of 3.9 per cent based on an annual rental income of £1.9 million.
One market expert claimed the unexpectedly low yield outstrips records achieved at the peak of the economic boom, but warned the surge in London property prices looks set to peter out as banks and buyers become increasingly wary of the frothy values in the capital.
In the past six months a slew of Nama-bound developers have rushed to capitalise on London’s mini property boom. Last March, Joe O’Reilly, one of the first borrowers to move into the toxic loans agency, bagged a profit of £1.7 million from the disposal of a large retail building on the King’s Road in Chelsea, while Paddy McKillen, who has mounted a legal challenge against the transfer of his loans to Nama, last month reaped a gain of over £11 million from the sale of two shops on Bond Street.
The largest transaction so far has been the sale of the Knightsbridge estate for £580 million by property syndicate Quinlan Private, which was rebranded Avestus Capital Partners.
Nama will shortly assume control of up to €11 billion-worth of loans to property syndicates.
