Property developer Ray Grehan has said he is not worried about the impact of falling property values on his €171 million site at the former Veterinary College in Ballsbridge in Dublin, but admitted the site was now worth less than he paid for it.
Grehan told The Sunday Business Post he would not be seeking to go ahead with the proposed €600 million development on the site until the property market recovered, even if he won a planning appeal lodged with An Bord Pleanála.
Grehan paid a record €81 million per acre for the site, and was granted planning permission earlier this year for a 13storey development of apartments, offices and shops.
That was appealed to An Bord Pleanála and, according to Grehan, its ruling will be delivered on November 17, having been put back twice. That will be almost three years since Grehan purchased the site.
Accounts for Kintene, the company that owns the site, show the €110 million borrowed from AIB to buy the site is due to be repaid next year.
The accounts show AIB has no security on the loan other than the site itself, a personal guarantee from Grehan on the interest, and a further guarantee for just €3.5 million.
Grehan has lent Kintene €72 million to help it purchase the site from a company called Glenkerrin Finance. This company derived partof its funding in the form of loans from Glenkerrin Homes which, totalled €35.2 million at the end of last year, and a further €48 million from Grehan’s own ‘‘current accounts’’, according to the Companies Registration Office filings.
Grehan said that the timeframe for repaying the €110 million loan was standard for a loan of that kind, and that he would expect to refinance it when going ahead with the project.
‘‘I have always said this was a five-to-seven-year project and we are now three years in,” he said.
Last week, AIB indicated that it was seeing an average 40 per cent fall in the value of development sites, although another senior banker suggested that, in some cases it was as high as 80 per cent.
The accounts for Kintene placed the same value on the site at the end of 2007 as when it was purchased two years earlier, at the height of the property boom.
Sunday Business Post