LLOYDS BANKING Group took control of the high-profile Heuston South Quarter complex in Dublin late yesterday following an agreement with the developer.
The bank appointed Paul McCann of Grant Thornton as receiver to the complex, made up of apartments, a hotel, offices and retail premises, on foot of a €257 million debt secured against the property.
Heuston South Quarter is close to Heuston railway station to the west of the city centre. Commercial tenants include internet giant AOL and grocer Superquinn, which operates a store there. The site was bought and developed at a total cost of €285 million.
Mr McCann took over as receiver to the two companies that own the property, Rhatigan Commercial Developments and Shoreview, late yesterday. The companies agreed that Lloyds should take control of the property during discussions held over the last few days. It is understood that Mr McCann will appoint a property manager to the business shortly.
Rhatigan Commercial Developments and Shoreview are joint ventures involving businessman and builder Padraic Rhatigan and private investors recruited by stockbroking firm Goodbody.
Mr Rhatigan’s other business, the JJ Rhatigan construction group, is not affected by the receivership. It was the development’s main building contractor but did not invest in Heuston South Quarter. It is understood that the building company’s accounts provided for some outstanding payments due from the project a number of years ago and its involvement ended there.
JJ Rhatigan is trading profitably and recently won projects worth €46 million from NUI Galway to construct research buildings. It is doing similar work for Athlone Institute of Technology and a number of State bodies.
Heuston South Quarter’s developers bought the site in 2005 from telecoms group Eircom and the Office of Public Works, the State’s main property manager, for €80 million. The exchequer made €45 million from the deal.
Eircom’s headquarters still occupy part of the quarter, but it is not involved in the receivership.
The properties under Mr McCann’s control are 340 apartments, the retail units and the Brunel office block, a distinctive building with a curved front at the western end of the site, part of which is home to AOL. The developers put €25 million equity into the project.
It is understood that Mr Rhatigan put up €5 million personally and investors recruited through Goodbody put up €20 million. The bank provided the rest.
The development companies had pre-sale agreements for the Brunel building and half the apartments before work started, but the property crash intervened and the purchasers were unable to complete the deals.
Late last year, a potential buyer for the entire site emerged, but the bank turned the offer down.
