Ballymore seals deal to loosen NAMA ties

Ballymore has struck a deal with a Malaysian investor that will see it recoup £428m and allow it to pay back a substantial amount of its debt to NAMA, as tipped by Real Estate Capital.

The developer has tied up an agreement with Eco World Investment to sell a 75% stake in three large London residential projects – Arrowhead Quay in Canary Wharf, phase two of London City Island on the Leamouth Peninsula and phase two of Embassy Gardens in Nine Elms. Together the developments will have an end value of around £2.2bn.

The three schemes total 2,800 units and also have 250,000 sq ft of leisure and office space planned as part of them. Ballymore will retain a 25% stake and manage the developments. The joint venture vehicle is to be called Eco World-Ballymore Holding Company Limited.

Eco World has close ties to SP Setia, the company that led the purchase and is leading the ongoing redevelopment of Battersea Power Station.

The former president and chief executive of SP Setia, Tan Sri Liew Kee Sin, is a non-executive director of Eco World and his son Tian Xiong is a major shareholder. Tan Sri Liew Kee Sin remains the chairman of the Battersea project, despite having left SP Setia in April. Many other former high level directors of SP Setia are amongst Eco World’s top brass.

Sean Mulryan, who heads Ballymore, was one of NAMA’s top 10 borrowers when the bad bank was formed in 2009 and in 2011 Ballymore agreed a seven-year business plan to pay back its £1.1bn. Since then it has steadily been selling off assets to that end.

Mulryan, said: “This is a significant deal for Ballymore, not only due to the substantial proceeds it will generate for this firm, but also in terms of providing a successful template for how projects such as these can be developed jointly in the future.

“In EW Investment we have a great partner with substantial property experience, backed by individuals who were responsible for leading the visionary plans for the redevelopment of Battersea Power Station. Together we will be bringing to market three outstanding residential property developments that provide diversity in both location and price point and which currently represent one of the largest such opportunities in London.

“Combining our development expertise and track record with EW Investment’s own experience and international marketing abilities will create valuable synergies for our joint venture and I look forward to working closely with them.”

Kee Sin added: “Ballymore specialises in large-scale residential projects and has extensive expertise developing schemes within many of the most important regeneration areas in central London.

“Their deep knowledge and experience in delivering projects from inception through to completion and post completion estate management in London make them an ideal partner to complement our strengths in delivering such developments globally.”

Aside from the joint venture Ballymore has 3,000 units under construction in London in its portfolio and a landbank for a further 8,000. In Ireland, in a joint venture with Oxley Holdings, it is developing 650,000 sq ft of office space and 300 homes adjacent to the new Central Bank of Ireland headquarters on North Wall Quay in Dublin.

The London JV process was codenamed Project Ace and Ballymore was advised by Lazard and CBRE. Eco World was advised by Deutsche Bank and JLL.