Monday, 27 August 2012

Irish Investors Pull Out of London High Street Properties- published in The Irish World

The economic crisis and its effects have caused many Irish investors to sell on their share in properties on some of London’s most fashionable streets.
Irish investors once owned a significant share in some of the city’s most sought-after properties but hefty debts at home in Ireland have caused them to part with their shares according to a recent report from commercial property consultants CBRE.
A huge decline in Irish shares over the past year in the London property scene differs greatly to previous years during the Celtic Tiger boom.
Bond Street and Oxford Street remain the city’s most lucrative areas for investment and London’s busiest streets had 90pc of their property sold last year by Irish investors, according to the report.
This is a huge jump from the mere 20pc of Irish that were involved in the sale of some of Europe’s most prestigious retail street properties in 2009.
Since then, Irish investors have sold £1.2bn worth of assets on the well-known shopping streets.
Today, the mix is changing and you are seeing different kinds of buyers entering the market, particularly from wider parts of the globe,” says Anthony Selwyn, director of central London research at Savills property group.
Some of the properties involved were destined to be put up on the market by certain investors in order to remedy their growing bank debts in Ireland.
"The West End retail properties sold by Irish investors in the last 18 months have been some of the most valuable in central London," said Phil Cann, of CBRE.
He added that “More often than not, the disposals are cross-collateralised with poorer performing assets within investor portfolios; however, these transactions should not undermine the impressive returns earned by investors in key London locations.”
Irish investors featured in 10 out of the 11 property transactions on Bond Street in 2011, and half of all transactions stemming from Oxford Street.
The value of Irish related sales in commercial property on the streets totals 94pc according to the findings, a huge jump from the 50 pc in 2010 and 38pc seen in 2009.
Last year Irish sellers were involved in the sale of properties housing Cartier Ltd, Daks and Prada on Bond street and McDonalds, French Connection, New Look and Russell and Bromley on Oxford Street, to name only a few.
The busy streets have seen Irish developers such as Charlie McCreevy, Joe Donnelly, David Daly, the Brennan Family, and Paddy Mckillen come and go.
Perhaps during the boom this monetary inspired invasion was a pay back for past experiences in Ireland.
London’s prestigious Cartier and Prada stores were sold by Irish investors for £50million.
The Prada store was sold to a Thai buyer for £23million while JP McManus and Aidan Brooks received around £18 for their Cartier store on Old Bond Street.
Anglo Irish Bank and Dublin-based asset managers, Wealth and Property Solutions Ltd (WAPS) sold a high profile retail building in Oxford Street for £76 million last year.
The multi-let building at Sedley Place on Oxford Street was bought for £69 million in 2005 from London Corporation inclusive of stamp duty, VAT and fees.
Last year Kieran Gaughan, managing director of WAPS, told The Irish Times that by holding the building through the depths of the financial crisis in 2008/2009 they managed to deliver rental growth from a number of rent reviews, letting vacant space and enhancing the investment value.
Last week saw Irish developer McKillen lose his long-running legal battle with Barclay Brothers over his share in some of London’s most high-end hotels.
The Belfast- born developer went up against the billionaire brothers, NAMA, and Derek Quinlan in an attempt to take control of Coroin, the company owned by the brothers responsible for Claridge’s, the Connaught and Berkeley hotels.
The Irish investors may now turn their sights to a more frugal property investment with derelict houses on Bond Street (in Staffordshire, England) being sold for the less risk bearing nominal fee of just £1 this week in an attempt to inspire reinvigoration in the area.
If investors pulling out of the London version of the street are counting their pennies, yet still feeling the urge to invest, this lesser-known option may prove more realistic.


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