THE NATIONAL Asset Management Agency finds itself on two sides of a major planning row in London, following the decision by the administrator of Battersea Power Station to object to plans by Ballymore Properties to develop a 15-acre scheme near the proposed new US embassy.
Ernst & Young, the Battersea administrator, was appointed to sell off the site after Nama and Lloyds Banking Group went to the high court in London in December to recover £500 million owed by the Treasury Holdings-controlled REO Ltd.
However, Nama has also agreed a seven-year plan with Ballymore Properties for it to pay down its £800 million debt, which depends heavily on the success of Ballymore’s Embassy Gardens project – the one opposed by the Battersea administrator.
In a filing to Wandsworth Council, Ernst & Young has said the Nama-approved Ballymore plan to have 130,000sq ft of shops in Embassy Gardens threatens its efforts to sell the 38-acre Battersea site with “maximum recovery for all creditors”.
Besides the shops, Ballymore plans to build 2,000 homes, 600,000sq ft of offices and a 100-bed hotel. The scheme will be developed around the proposed US embassy’s Nine Elms site.
Ballymore’s plans go before Wandsworth Council on February 16th.
Ballymore, in partnership with Nama, lodged outline plans for the scheme last June.
The first phase of the plan includes 38,000sq feet of retail space, including a 22,000sq ft Waitrose store and 600 apartments.
In its letter to Wandsworth Council, Ernst & Young warned that, “given the current economic climate”, councillors needed to ensure that Battersea – where numerous development plans have failed over the past 30 years – remained “a key regional policy priority and is not threatened by development proposals that are clearly contrary to policy”.
“The key responsibility is to ensure Battersea Power Station remains a viable and attractive proposition in order to conclude a sale that provides maximum recovery for all creditors.”
The Ballymore Embassy Gardens plan includes a number of shops that exceed “the level required to serve the needs of the development” and threaten to have “an adverse impact” on the “commercial attractiveness” of Battersea, Ernst & Young said.
However, Nama executive Mark Pollard has written to Wandsworth in support of Ballymore’s plans, saying the development of Embassy Gardens is fundamental to the entire Nine Elms regeneration plan.
“While Ernst & Young and their advisors believe the plans to be commercially misguided, Nine Elms requires significant impetus that the development will provide through new economic activity and new infrastructure and transport provisions necessary for the area,” he said.
The success of the Battersea development does not depend on whether Embassy Gardens has a “comparatively small supermarket to support its direct population”, Mr Pollard told the council.
So far, the US embassy has supported Ballymore’s plans for Embassy Gardens, while Wandsworth Council is minded to approve, subject to a number of legal requirements being met.
Meanwhile, London-based magazine Property Weekhas reported that AIB is selling £800 million of UK property loans – one-tenth of its portfolio in the country.
AIB is preparing to appoint advisers for the sale of the loans, which are expected to average £5 million or less. However, the bank would not comment when approached by Property Week.
AIB’s results to June 2011 showed it had €8.5 billion worth of UK commercial property loans.
