Five members of a Co Meath family, long involved in the property business, made a profit of some £6.24 million (€7.92 million) when a Dublin office block they bought with a group of investors for £9 million in 1996 was sold to the State for £23.5 million (€29.83 million), The Irish Times has learned.
Documents obtained from the Registry of Deeds show that Folio Homes, a company controlled by Mr David Maher, took a 19.14 per cent stake in Lansdowne House, an eight-floor office block beside Jury's Hotel on Lansdowne Road, at a cost in 1996 of some £1.72 million. This share was worth £4.5 million when Lansdowne House was sold to the Office of Public Works (OPW) in August, yielding a profit in three years of £2.78 million.
Mr Maher's wife, Ms Sarah Jane Lawson, paid £861,300 for a 9.57 per cent stake in the building in 1996. When sold last month, this share would have been worth £2.25 million, making a profit of £1.39 million. Mr Maher's brother, Bryan, made a similar profit when he sold his 9.57 per cent share in Lansdowne House.
When contacted yesterday, Mr David Maher would say only that the profit was no more than normal in terms of what properties were making on the market. A sister of Mr Maher, Ms Berenice Maher, made £416,150 on her 2.87 per cent share of Lansdowne House. Another sister, Ms Gervaise Maher, made £276,950 on a 1.91 per cent stake in the building. The family formerly owned the Novum electrical appliances business, founded by their father Joe in 1954.
Folio Homes has a long involvement in the Dublin property market. In 1979, Folio Homes bought some 650 rent-restricted "artisan" houses from Dublin Artisan Dwellings for £808,000. It was believed at the time that the net worth of annual rents on these houses was £30,000.
The rent-controlled structure was deemed unconstitutional by a 1981 Supreme Court decision, leading to the establishment of the Rent Tribunal as the arbitrating body on properties formerly rent-controlled.
The OPW's decision to buy Lansdowne House was in line with a Government policy to buy buildings long occupied by public service bodies. When sold, Lansdowne House was producing an annual rental income of £850,000, £770,000 of which came from the eight floors rented by the OPW. Members of the Odlum family, the former grain merchants, are believed to have made a £3.47 million profit when their company, WP & PO Holdings, sold a 23.92 per cent stake in Lansdowne House.
Investors in the office block also included a former Telecom chairman, Mr Ronald Bolger, whose 4.78 per cent stake would have made a £693,100 profit.
Mr Raymond Tilson, of Tilson Asset Management, said he had co-ordinated the project with property consultant Mr Bill Nowlan. While Mr Tilson's 2.87 per cent stake would have yielded a £416,150 profit, Mr Nowlan said he had not taken a stake in the building.
Mr Tilson said he was "very surprised" that the £9 million investment yielded a £14.5 million profit in only three years. "I looked at this as at least a seven- or eight-year investment. "If you take higher risks in life, you may get a higher return," said Mr Tilson. "I felt, and Bill Nowlan felt, that if I had clients big enough to take the risk, then we should do so."
Citing the reduction in Capital Gains Tax to 20 per cent, Mr Tilson said: "I believe that this transaction would not have occurred if Capital Gains Tax was 40 per cent."
Mr Nowlan said: "The performance of the investment was generally in line with market conditions - it's just that the size of the sale and the effects of gearing made a good return."
A retired businessman, Mr Alan Deacon, made £1.39 million on the sale of his 9.57 per cent share. Businessman Mr Patrick Ridge made £693,000 on the deal and Mr Anthony Nicholson made £416,000. Dublin-based Dock Holdings, whose directors include Mr John Pierce Higgins and Mr Niall Pierce Higgins, made £832,200.
