Irish asset agency eyes London hotels
01st March 2010
Three of London's most prestigious hotels could end up being controlled by the Irish government.
The Irish Times has reported that the Berkeley, Claridges and the Connaught may be about to be taken over by the Republic's National Asset Management Agency (Nama).
The hotels are owned by financier Derek Quinlan's Maybourne Hotel Group.
Nama, has been set up to buy and manage bad property loans held by the country's financial institutions.
It is believed the Maybourne Hotel group is being considered as a candidate for Nama as Anglo Irish Bank and Bank of Ireland have both advanced hundreds of millions of euros in loans to the company.
The Irish Times also reports that the first round of properties earmarked for Nama include five Irish hotels: the Shelbourne, the K-Club, the Ritz Carlton in Wicklow and the Radisson and G Hotel in Galway.
However, the paper says that guests of the hotels are unlikely to notice many differences if they are taken over by Nama.
It quotes one informed source as saying that the developers who bought the properties "will stay on and manage the asset on behalf of Nama.
"There may be one or two cases where the agency decides to install a new team, but most of these businesses are solid, they were just bought and developed at inflated prices. "
Celtic Tiger
The Maybourne Group and the five Irish hotels were seen as key symbols of the success of the Republic's 'Celtic Tiger' economy.
Their acquisition by Nama would show the disastrous consequences of excessive loans to property developers during that period.
The aim of Nama is to remove bad or impaired assets from the banks' balance sheets, and allow them to start lending again and get credit flowing to businesses and home buyers.
It is also hoped that it will enhance Ireland's international credit rating.
The plan assumes Nama's 54bn euro debt will fall by 6. 5bn euros per year from 2013 onwards, until Nama's wind-up in 2020.
About 22bn euros of the assets being taken over by Nama are in the UK, mainly in London and in Northern Ireland.
Source: BBC