Although the sale by Derek Quinlan of a car park on South Audley Street in London’s Mayfair stalled at the end of last year, it seems that NAMA has had more success just around the corner at 20, Grosvenor Square which according to sources has sold for GBP £250m (€295m). The seller is understood to be a consortium led by Richard Caring, the 62-year old British rag-trade to restaurant-venue millionaire behind celebrity restaurants such as The Ivy and Le Caprice in London, the mid-market Strada and Belgo chains as well as Harry’s Bar and Annabel’s nightclub not to mention Wentworth Golf Club. And if you’ve ever been to Carluccio’s on Dawson Street in Dublin, you can ponder the fact that 12% of the operation is owned by Richard Caring, or at least it was until the end of last year when Dubai-based retail and restaurant investment company, Landmark Group bought the chain.
Irish Nationwide Building Society was reported to have provided a 95% mortgage on 20, Grosvenor Square which was formerly home to the US Naval Offices. Handy that, as it was just across from the US Embassy on the other side of the Square which is scheduled to relocate to premises in New Covent Garden (behind the Battersea Power Station site) in 2017. 20 Grosvenor Square was bough by Richard Caring in 2007 for GBP £250m. In May 2009, Westminster City Council granted planning permission to develop the 100,000-square foot building into 41 luxury flats but development has yet to take place.
NAMA has never confirmed that it acquired the INBS loan secured by 20, Grosvenor Square but it would seem to fit the NAMA eligibility criteria in the NAMA Act, that is, that the loan was with a NAMA Participating Institution (INBS) and was for development. Although NAMA expects to pay just 30c in the euro for INBS loans generally, it is likely that the agency paid far more for this loan. That said, it is understood that NAMA has made a substantial profit on the transaction.
UPDATE: 6th March, 2011. The Estates Gazette is reporting that the deal, which it claims will see GBP 300m repaid on an INBS loan, is still to be finalised. It claims that the deal is the sale of the loan, rather than the property itself and it seems that Richard Caring and the consortium he heads may retain paper ownership but answerable to a new lender.
UPDATE: 25th July, 2011. Britain’s Property Week reports that this transaction may yet remain to be completed. Whilst reporting the speculation that the Caring consortium may have bought the loan securing the building from NAMA at a discount, the magazine says this may not be the case and the current health of London’s West End residential market may embolden NAMA to seek full value for the loan. Apparently Deutsche Bank is involved with providing senior finance for any buyout of the loan and a syndicate of mezzanine finance is being assembled for the remainder.
UPDATE: 21st September, 2011. The Irish Times is reporting that the loan refinancing of 20 Grosvenor Square has “been finalised”. Reportedly Lloyds, Deutsche Bank and a Singaporean bank, United Overseas Bank has provided GBP 230m of finance and GBP 100m mezzanine finance is being provided by LaSalle Investment Management and Safanad.
UPDATE: 4th May, 2012. Almost incredibly this transaction has not yet completed and NAMA is still the lender on this property after approving several extensions to Richard Caring to attract investment to refinance the NAMA loans. The latest, according to UK commercial property portal CoStar.co.uk is the Qatari Investment Authority is in talks to take over the loans and provide finance. It was recently revealed in the Paddy McKillen case against the Barclay brothers that Paddy had a relationship with Tony Blair and there was a belief that Tony’s company, Tony Blair Associates played a part in help broker a financing arrangement between Paddy’s company and the Qataris. Maybe it’s time for NAMA to call in Tony to help the Agency finally exit from Grosvenor Square.
UPDATE: 20th December 2012. It looks like the last two years of negotiations have come to nowt withthe UK’s Property Week yesterday reporting that the property is to be put on the market in the New Year after NAMA refused to accept part-repayment of the loan. The London residential and development market has held up well in the last two years and NAMA is not likely to have been damaged by any delay in resolving this loan.
UPDATE: 12th May 2013. Property Week reports that “the Abu Dhabi Investment Council, in a joint venture with Finchatton, has exchanged contracts to buy 20 Grosvenor Square for more than £250m”
NAMA Wine Lake 
Forgive me if I am wrong, but on the face of it, it looks like the NAMA strategy is to sell property that is appreciating while holding on to that which is falling in price. The Google property and 20, Grosvenor Square certainly seem like good candidates for appreciation, especially the second.
@JW
It’s a case of get in what you can boys. If you bought it for X and you are selling for X+10% then thats good enough for the IMF/EU and thats good enough for NAMA. Never mind that the taxpayer has to stump up the X to fill the hole in the balance sheet of the banks. NAMA’s original remit has been overtaken by circumstances. Now it is in liquidation mode…
I see that the the Irish Independent plagiarised your report!
http://www.independent.ie/business/irish/nama-on-brink-of-euro300m-sale-in-grosvenor-square-2554053.html
Now now WSTT, the Independent is a fine newspaper and I’m sure their reporting is a co-incidence. Just like their reporting today of the Paddy McKillen/Nude/LVMH story which bears a passing resemblance to a post on here yesterday.
Independent – 24/2/2011
http://www.independent.ie/lifestyle/independent-woman/beauty/beauty-more-than-skin-deep-as-giant-buys-into-alis-firm-2554028.html
NWL – 23/2/2011
https://namawinelake.wordpress.com/2011/02/23/u2-bono%E2%80%99s-wife-and-paddy-mckillen-in-nude-transaction/
Again a coincidence I’m sure though I was suprised they mentioned celebrity Nude users in exactly the same order as the post on here (and they were obtained from different research sources here). As I say, a coincidence no doubt from a fine organ of the press.
Isn’t impersonation (plagiarism) the highest form of praise?- Oscar Wilde (amended)!
I’m sorry but what have NAMA done here except put a massive hole in the INBS balance sheet. A hole that the taxpayer had to fill. Was the management of INBS not capable of doing the same deal to recover the loan? How can NAMA justify paying so little for this loan? I presume Daly and McDonagh will be issuing another fawning press release and justifying their salaries? Also I thought that no borrower would be allowed to buy back their loan? I guess it’s one rule for the Paddies and one rule for the English gentry.
@BR, a few points
(1) “what have NAMA done here except put a massive hole in the INBS balance sheet” – NAMA has created certainty over the value of this loan. INBS received NAMA bonds which have a more-or-less certain value with the ECB and INBS was able to obtain liquid funds from the ECB who would not have lent on the back of what was originally a loan with an uncertain value
(2) “How can NAMA justify paying so little for this loan?” Valuation is not a precise science and having seen the building I would have said it was quite hard to value. Remember even in its undeveloped state in 2007 it was valued at €2,500 psf which is pretty tasty. Even today with development it is hard to see the building yielding more than €3-4,000 psf and remember much of the footprint will be used up in common areas. There are a few unknowns like the effect of redeveloping the US embassy site across the road into a hotel when the embassy moves out in a few years. So I can understand how NAMA might have paid, say €150m for the loan. If INBS thought it was being paid too little then it could have disputed NAMA’s valuation.
(3) “Also I thought that no borrower would be allowed to buy back their loan?” What I understand has happened here is that the loan has been repaid 100%. Anyone can do that, even a developer. Also in this case I understand that a new un-named financier put up the money so even if the loan was not repaid 100% the transaction would have been allowed.
I would agree though that ultimately all this transaction had done is allowed the taxpayer break even because the profit at NAMA offsets the loss at INBS, and we have had to pay the not inconsiderable costs of funding NAMA for that privilege of breaking even. I think there will be a press release when the sale of the loan concludes, it is a great success for the folks at NAMA.
Bloomberg reporting this as fully financed now.
Staple-less by the looks of it!
http://www.bloomberg.com/news/2011-09-19/billionaire-caring-gets-518-million-refinance-deal-costar-says.html