Developers focusing on deals abroad

With Ireland a lost cause for at least a decade, the Nama boys are building their empires elsewhere, writes Ronald Quinlan

Sunday June 27 2010

"No, we're not putting the debt of a single developer on the back of anyone. We're chasing developers to the ends of the earth."

Minister for Finance Brian Lenihan in an interview on RTE1's 'Primetime', March 30.

THE boys are already in Brazil. They're also in Switzerland, Italy, Qatar, China, the United States and the UK. Take it as read that the boys want to be anywhere but Ireland right now. For as far as the developers are concerned, this country is a lost cause for at least the next decade, and possibly even longer.

There is no upside in staying here; such has been the severity of the crash. Better to move on with the rest of the world and leave Nama to dot the 'i's and cross the 't's where the banks didn't.

Brazil is just one place worth moving to right now.

For a start, they have €250bn on deposit with the International Monetary Fund and a requirement to build seven million new houses in a hurry.

"A hot market" was how Patrick Durkan of Durkan Residential described it, as he addressed a room full of people from the construction industry at a conference organised by the Brazilian Embassy in Dublin last Thursday.

The Durkans -- a major name in both the Irish and UK residential property markets for more than 40 years -- have just completed their first apartment development in Cotia, a city with a population of 180,000 in the state of Sao Paulo.

The 149 two- and three-bedroom units at Resort De Granja were sold out within three weeks, according to Durkan, such is the need and appetite for housing there.

And the Durkans aren't the only Irish developers to have expressed an interest in Brazilian real estate. The Sunday Independent understands that both Ballymore Properties chief Sean Mulryan and Glenkerrin homes boss Ray Grehan have made their own inquiries into opportunities in the vast South American country.

A combination of difficulties with the registration of land title and the language barrier, however, proved to be disincentive enough for both men to stay out of Brazil -- for now at least.

Closer to home, Mulryan and Grehan are both forging ahead with projects in the east end of London as the city gears up for the 2012 Olympics.

While the Ballymore man has already seen more than €1bn in loans associated with his companies taken over by Nama as part of its first wave of transfers, his experience of the agency hasn't been particularly negative just yet.

Indeed, the Sunday Independent has learnt that Nama has already approved the payment of fees for a team of top architects, including the hugely-celebrated Terry Farrell, for Ballymore's Embassy Quarter development on London's Nine Elms Road, such is their apparent confidence in the project.

Glenkerrin Homes boss Grehan -- best known for his record-breaking €171m (€81m per acre) purchase of the site of the former UCD Veterinary College in Ballsbridge -- is also making the most of the resurgence in the London property market. The Kildare developer spends most working weeks in the UK capital overseeing Glenkerrin's projects in Canary Wharf and Ealing and retreats at weekends to the Mallorcan capital of Palma de Mallorca, where he has both an apartment and a 75-foot yacht. The Sunday Independent understands Grehan is due back in Dublin within the next fortnight for meetings with Nama to discuss his company's business plans.

Elsewhere in London, financier Derek Quinlan has been spotted regularly in recent months working his mobile phone amidst the sumptuous surrounds of Claridge's (the hotel he and a group of Irish investors famously bought as part of the Maybourne Hotel Group in 2005 for €1.15bn).

Quinlan, who stepped down from his position as chairman of Quinlan Private -- the property investment firm he founded in 1989 -- last summer, hasn't been commuting to the UK from any of the several substantial houses he owns on Dublin's Shrewsbury Road, however.

Rather, the former tax inspector with the Revenue Commissioners has been flying to and from Switzerland, having taken up residence for "tax and personal reasons" in Epalinges, a fashionable hamlet on the outskirts of Lausanne.

Quinlan has been working aggressively to manage his personal borrowings on the property assets he acquired in partnership with a number of high net-worth individuals during the boom years, and with good reason.

The erstwhile financier to Ireland's great and good has already seen some €500m of his personal borrowings with Irish banks taken over by Nama as part of its transfer of the loans of the top 10 developers in May.

Quinlan is currently involved in efforts along with his co-investors in the Maybourne Hotel Group -- Paddy McKillen, Manchester businessman Peter Green and Dublin stockbroker Kyran McLaughlin -- to repay fully loans of €740m to Anglo Irish Bank and Bank of Ireland, in an effort to prevent their transfer into Nama.

Not that Nama is the worst place for a developer to have their loans. Take the case of Treasury Holdings directors, Johnny Ronan and Richard Barrett, for example. Only last week, it emerged that REO (a Jersey-registered company in which Treasury is a 67 per cent shareholder) booked a loss of nearly €1.2bn in the 14 months to last February, and will now need working capital from Nama to fund its operations as it seeks planning permission to redevelop the derelict Battersea Power Station in London.

While that request for help from the taxpayer awaits a decision, Ronan is understood to be recharging his batteries on the Amalfi coast in Italy, having taken time out from the day-to-day 'grind' of being a developer, and the rather unwelcome publicity his €60,000 jaunt to Marrakech with former Miss World Rosanna Davison attracted.

Richard Barrett, meanwhile, spends the majority of his time in Shanghai where he manages Treasury's Chinese development business, the Treasury China Trust.

Relatively closer to home, Clare-born developer Bernard McNamara has been doing his best to forge a future in Qatar after seeing his business here implode in spectacular fashion.

McNamara may be into Nama for an eye-watering €1.5bn in loans, but that hasn't stopped him from acting as a consultant for the newly-formed Arabian McNamara Contracting. The company has recently been engaged by Qatar Airways to work on a new terminal at Doha International Airport, with the contract having a value of between $16m (€13m) and $30m (€24.3m).

While that sum may not put much of a dent in the massive debt pile McNamara has built up from ill-fated Irish investments, it should help to keep the Nama wolf from the door of the Clare man's palatial home on Ailesbury Road.

Unlike McNamara, Laois-born developer Paddy Kelly has already given up his home on Shrewsbury Road, rented it out to the Chinese Embassy and taken up residence on nearby Morehampton Road with his wife, Maureen.

Whatever travails Kelly has in the current climate, however, he refuses to let it get him down. These days the developer they call the 'gentleman' can be found taking afternoon tea in the Four Seasons Hotel in Ballsbridge, or catching a few rays in Florida, where it is believed he has a holiday home.

Sunday Independent

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