It was inevitable that with such a colossal portfolio of property-related assets under its control that NAMA would eventually come into conflict with itself. It is reported by the UK’s commercial property service, CoStar that the administrators which NAMA had appointed to the Battersea Power Station – owned by NAMAed Treasury Holdings and a related company REO – in London in December 2011 have lodged objections with the local council in respect of a development adjacent to the iconic power station. That adjacent development is being led by NAMAed Ballymore which is being financially supported by NAMA. It’s getting surreal.
CoStar has seen the objection lodged with Wandsworth council which oversees planning of the Battersea Power Station and the adjacent Elm Park development. The problem is that Ballymore’s development will now have a retail anchor which will place it in competition with the Battersea Power Station development, and reduces the attraction of investment in the power station site.
The conflict comes about because Ernst and Young, the administrators at the Battersea Power Station have a duty to maximise the financial return in selling the site, and remember that the site is being marketed by Knight Frank. And that duty is owed not just to NAMA, but to other lenders in the scheme including Lloyds and the former owner of the site, Victor Hwang.
Sean Mulryan’s Ballymore is NAMA’s pet developer and is steaming ahead inLondonto develop several sites at present in London’s docklands, in Hampstead and in the City. And of course in Elm Park in Wandsworth which will see some 2,000 homes and nearly 1m sq ft of commercial development. NAMA has approved advances to developers of nearly €1bn in total, though it is not clear if Ballymore has benefited from this financing, though the betting is that it has.
It is expected that more of these conflicts will arise in future; in fact, I’m surprised that there haven’t been such conflicts already in Ireland. That might be because very little is in fact being developed or it might be because NAMA’s receivers in its own backyard might be more sensitive to the Agency. The planning decision in respect of the Ballymore development comes before Wandsworth’s planning committee next Thursday, 16th February. The application is in fact a variation to a previous planning permission and can be seen here.
UPDATE: 17th February, 2012. It seems NAMA (Battersea Power Station) was unsuccessful in its objections to NAMA (Nine Elms) plans which were rubberstamped yesterday by Wandsworth Council, according to UK commercial property information service CoStar. This is another fillip to Ballymore which will now proceed to develop the site with a plan which is understood to have NAMA’s full-backing, including funding potentially.
I understand the in situations like this Chineese walls are erected in the Firm
E and Y within a strict code of practice
All the better to rake up millions in unnecessary fees at the public’s expense.
Nama is beiniing to resemble a remuneration generating perpetual motion machine. Nothing seems to go in or out, but salaries, €765 per hour fees and bonuses seem to accummulate out of thin air.
(Of course, just like real perpetual motion machines, Nama does have an input of raw energy: public money.)
‘Battersea Power Station valuation up 17.2% from £425 million to £498 million since February 2010′
‘At 28 February 2011 the freehold interests in the properties know as Battersea Power Station and 88 Kirtling Street were valued by King Sturge LLP, acting as external valuers…………….’
http://www.treasuryholdings.com/rubylith/files/REO_-_Preliminary_Results_(RNS_Doc_23_June_2011).pdf
Hope JL picked up all the liabilities,is that not Mulcahy’s old shop.With various commentators suggesting 150million, they must be retaining counsel,will NAMA pursue JL….ahh gone on.
“Jones Lang LaSalle Inc. (JLL), the world’s second-largest publicly traded real estate broker, bought the London-based firm King Sturge LLP for 197 million pounds ($324 million) to become the largest property adviser in the U.K.”
http://www.bloomberg.com/news/2011-05-27/jones-lang-lasalle-buys-king-sturge-to-overtake-competitors-in-u-k-market.html
The above is nonsense from EY to distract from the fiasco that continues to be BPS,so a bit of retail down the road may result in an erosion of value by over 50%!
“More bad news to come at Battersea Power Station? Estate agent to the gentry Knight Frank has been appointed by receivers to flog the 55-acre plot.
But if the banks think they are going to get back the £324 million advanced to the previous owners, they may be in for a shock. “The site is worth about £150 million, tops,” says one bidder who has taken a look. “But if you could only knock down that bloody power station…”
http://www.thisislondon.co.uk/markets/article-24027013-city-spy-knockdown-price-for-power-station.do