As we have seen in the past four years, all good things come to an end with the Celtic Tiger de-clawed and passed out on the floor, property values collapsed despite the enormous distortions still in place and the banking sector still in retreat. Developers have seen their wealth wiped out on paper, and oftentimes in the wallet also.
But just as night turns to day, so also do bad things come to an end. Two weeks ago, €1bn-indebted NAMAed developer, John Fleming emerged from bankruptcy in the UK. No word yet on plans for the 61-year old Cork man but with his experience in property development, energy and other sectors, he is likely to be a man in demand.
The Grehans, Ray and Danny, have been associated with companies which are now bidding for former Grehan assets foreclosed by NAMA.
But it is the UK’s Property Week (subscription required, but adequately re-reported with appropriate accreditation for once by the Irish Independent today ) which confirms that developer, Donal Mulryan, is now “set to be” employed by Morgan Stanley which has a huge property portfolio under management including, reportedly, some of Donal’s properties, the loans on which were recently, again reportedly, acquired from NAMA.
It was 8th October 2011 when Bridget O’Connell at the UK’s Estates Gazette (not available online without subscription) reported that Donal Mulryan’s UK GBP 220m (€257m) portfolio of property was to be put on the market by Donal under NAMA’s auspices. Savills was named as the company appointed by Donal to sell the portfolio of mostly residential developments in the North West of England (Manchester is where Donal’s main vehicle, West Properties, is centred) but also a site close to London. It now seems that NAMA is to sell the underlying loans to Morgan Stanley for GBP 65m (€76m) according to Property Week. And Donal is said to be “set to be” engaged by Morgan Stanley in a management role for which he will, reportedly, be paid a fee. What sort of fee could Donal expect for managing GBP 65m of assets (worth GBP 220m originally)? Difficult to say but with performance bonuses, I would have said the mid to high hundreds of thousand pounds per annum.
NAMA, Donal and Morgan Stanley are not commenting on the reports. Donal is the brother of Sean Mulryan of Ballymore fame which the Independent today claims is “the largest debtor in NAMA” Donal at one time was involved in Ballymore but for the last decade has been developing property on his own account, and was said to have been worth €1bn at the height of the boom.
So there may be life for developers after NAMA. I’d guess that in the short term, there will be consultancy roles aplenty as cash-laden investors chase after loan and property portfolios, and who better to guide their efforts than the former owners or at least developers who would be familiar with the portfolios. For most developers it will perhaps take longer to build independent wealth based on their core skills in property development, most are broke and sources of finance are like hens teeth. There will be exceptions, Treasury China seems to be doing roaring business and Ballymore itself is continuing to develop London’s Docklands, but for most developers, consultancy and fee income looks like the best they can achieve in the short term.
Of course they need extricate themselves from NAMA first which is not straightforward.