Plundering Ireland? – Disposing NAMA Assets at 50%+ Below Value – McAleer & Rushe, British Land, Bank of Ireland and NAMA


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2-14 Baker Street | 10 Portman Square

There has been much discussion in the media and among individuals about the disposal of NAMA assets at below and at substantially below market value. Is such discussion just speculation or is it justified? The information here sets out a statement of fact and a timeline relating to just one single NAMA related site.

The information here is presented for informational purposes only and is not a pronouncement on any single party or entity. Read it and then make your own mind up. Does this represent one of those ‘shady’ or even illegal deals we hear murmurings of? Or is this legitimate business?

August and September 2005

Several media articles report on agreement between British Land and McAleer & Rushe for the sale (by BL) of 2-14 Baker Street (later renamed as 10 Portman Square). This was the second reported purchase by McAleer & Rushe from British Land – the previous deal was for the Swiss Centre in Leicester Square.

Guide price for the 2-14 Baker Street property was UK£47.5m with British Land offering it as a potential 150,000 sq. ft development opportunity.

5th October 2005

2-14 Baker Street purchased by McAleer & Rushe by British Land for UK£57.2m. Purchase funded with a Bank of Ireland loan. The property comprised 94,000 sq. ft. held on a 98 year headlease from the Portman Estate. Travers Smith acted for McAleer & Rushe Group on the acquisition.

16th December 2008

Planning Application submitted to Westminster City Council listing Owners of 2-14 Baker Street as:

  • Portman Estate (freeholder)
  • Mourant & Co Trustees Ltd and Mourant Property Trustees Ltd as Trustees of the Baker Street Unit Trust, 22 Grenville Street, St Hellier, Jersey JE4 8PX
  • Baker Street Investments Limited 17-19 Dungannon Road, Cookstown, BT80 8TL
  • EDF Energy Networks, 40 Grosvenor Place, London SW1X 7EN (who had a sub-station in the basement of the building)

Planning application filed by Gerald Eve, Chartered Surveyors and Property Consultants

16th March 2009

Planning Approval granted by Westminster City Council to McAleer & Rushe Properties Ltd. Planning consent obtained for 139,000 sq ft of office space with retail units at ground level. This is nearly 50% larger than the original building – which was 94,000 sq. ft.

16th April 2010

McAleer & Rushe sell 2-14 Baker Street back to British Land for UK£29m – representing a loss of UK£28.2m (unadjusted) despite the site having been granted planning permission for new building that will be almost 50% larger than the original.

British Land issue a press release outlining the deal. The press release announcing the deal states “As part of the sale arrangement, McAleer & Rushe will take a share in the development profits.”

Notes: 2-14 Baker Street is a prime Central London location at the start of Baker Street and adjoining Portman Square. Property prices in the vicinity were not unduly affected by the property downturn.

The property was not placed on the open market. Commenting on the deal, JP Morgan say of British Land that they are “on the right side of the trade”

16th April 2010

Incorporation of 2-14 BAKER STREET TRUSTEE NO.1 Limited; and 2-14 BAKER STREET TRUSTEE NO.2 Limited in Jersey. A legal agreement signed with Westminster City Council in 2010 shows a connection between these entities and McAleer & Rushe.

11th October 2010

Planning Memorandum and Agreement signed with Westminster City Council. The agreement is signed as a Deed by 2-14 BAKER STREET TRUSTEE NO.1 LIMITED acting in its capacity as co-trustee of the Baker Street Unit Trust and signed by Andrew McNulty.

Memorandum and Agreement parties listed as:

  1. The Portman Estate Nominees (One) Limited and The Portman Estate Nominees (Two) Limited
  2. 2-14 BAKER STREET TRUSTEE NO.1 LIMITED and 2-14 BAKER STREET TRUSTEE NO.2 LIMITED acting in their respective capacities as trustees of the Baker Street Unit Trust
  3. The Lord Mayor and Citizens of the City of Westminster

Important Note: P34 of McALeer & Rushe Annual Accounts for 2010 and filed in March 2011 lists companies in which the directors of McAleer & Rushe own interests. This lists Baker Street Unit Trust as belonging to the directors of McAleer & Rushe. Note that it is listed not as an entity belonging to McAleer & Rushe – but is specific in stating it to be one of “a number of other companies in which Mr S McAleer and Mr E Lafferty have declared interests…”

21st March 2011

McAleer & Rushe submit a business plan to NAMA

22nd March 2011

McAleer and Rushe file annual accounts. Loss of £11m on turnover of UK£62m. Turnover down 45% from the previous year. As at March 2010 the company had £51m of term loans and a further UK£10m of overdrafts. All loans repayable on demand – implying there had been a breach of covenant. Auditor expresses uncertainty about “going concern”.

29th March 2011

BBC reports McAleer & Rushe loans taken over by NAMA – http://tinyurl.com/7zdhpcx

21st September 2011

Nigel Webb of British Land presents to a Offices Analyst & Investor Event at the British Land head office in London. The presentation document (page 19) refers to ‘10 Portman Square’ which was previously known as ‘2-14 Baker Street’ and wrongly refers to the sale of the property to McAleer & Rushe as a transaction that took place in 2004 instead of the correct 2005. See http://tinyurl.com/7dcfoh4

Excerpts from Nigel Webb’s presentation;

“…. we repurchased for approximately 50% of the value it previously sold for in 2004, we structured a three-way deal to purchase the site from McAleer and Rushe and the Bank of Ireland, with the consent of Nama.”

This is not an insignificant achievement.”

The acquisition has already performed very well to date. Since purchase, the valuers have increased the site value by 52% net of capex.”

Summary Points

So we have a site that has been sold with NAMA approval and with the agreement of Bank of Ireland (according to Nigel Webb of British Land) for at least half it’s real value. Where this leaves the bank loan raised for the original purchase of the site is unknown at this stage. But that loan (or any remaining part of) is now with NAMA.

In the year following the reacquisition of 10 Portman Square (2-14 Baker Street) by British Land – we have a senior employee of British Land (in the presence of members of the Board of British Land, and other senior management) boasting to analysts and investors that “…. we repurchased for approximately 50% of the value it previously sold for in 2004, we structured a three-way deal to purchase the site from McAleer and Rushe and the Bank of Ireland, with the consent of Nama.” And then rubbing it in with the comment “This is not an insignificant achievement.” And then boasting again that “Since purchase, the valuers have increased the site value by 52% net of capex

You Decide

Is this deal reflective of a straight and smart business transaction – or are you inclined to wonder or speculate whether this represents a case of asset-stripping the Irish State by disposing NAMA assets (and/or NAMA bound/NAMA Related) below market value.

Of course there is an added question as to why this property was not offered by McAleer & Rushe – or Bank of Ireland – or NAMA on the open market……

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About 10 Portman Square | 2-14 Baker Street

10 Portman Square | 2-14 Baker Street Campaign This blog makes no claim of association or representation of the development known as 10 Portman Square | 2-14 Baker Street in London. This blog is a communication tool only and serves to highlight issues affecting members of the public and residents in the vacinity of that site. The development site at 2-14 Baker Street (10 Portman Square) was acquired by McAleer and Rushe in 2005 with a loan from Bank of Ireland. The price paid was £57.2m. Unable to repay the loan, the debt was designated for NAMA. Before NAMA assumed the debt, McAleer and Rushe sold the site back to British Land in 2010 for nearly £30m less than it had paid. The deal appears to have benefited McAleer and Rushe in a number of ways that may not be realised financially by NAMA. This includes a share of the development profits and the awarding of the construction contract to McAleer at a time that their auditors (KMPG) suggest that this company may not be "a going concern". According to McAleer & Rushe's latest available accounts (filed 2011) all the company's debts are "payable on demand" suggesting that they have not met their repayment schedule on their loans. There are ongoing issues at the site at 2-14 Baker Street (10 Portman Square) affecting members of the public and local residents. Members of the public and local residents have been put at risk many times and, too date, neither British Land or McAleer & Rushe appear to have faced no real consequences from a regulatory or legal persective. McAleer & Rushe have resorted to threats, harrassment and intimidation towards local residents objecting to unsafe practices and affected by the practices employed on and around the site. There have been a number of safety failures leading to deaths on other McAleer & Rushe sites in the UK. Full information and supporting evidence is available on request to interested parties.
This entry was posted in 10 Portman Square, 10 Portman Square l W1, 10portmansquare, 2-14 Baker Street, Bank of Ireland, Boris Johnson, Brighton & Hove City Council, British Land, Building Site, Child Safety, Children, children's playground, Commercial Development, Competition, Congestion Charging London, Construction, Construction Deaths, Disabled Access, HSE, Legal Action, London, London Mayor, London Olympics, Lottery Winner, Mayor of London, McAleer and Rushe, Mob, NAMA, NAMA Wine Lake, NAMAWINELAKE, Parking in London, Retail Development, Street Parking in Marylebone, Street Parking in Westminster, Tax Avoidance, Thug, Thuggery, Tourism London, Uncategorized, West End, Westminster, Westminster City Council, Where to park in London and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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