Nama shortsighted on Battersea decision, says developer

The Irish taxpayer would have shared in billions of euro of profit if the National Asset Management Agency had allowed Treasury Holdings to go ahead with plans to redevelop the Battersea Power Station site in London, developer Johnny Ronan has claimed.

In an interview with UK trade magazine Property Week , Mr Ronan said "a very shortsighted view was taken, especially by Nama" in relation to the prime site.

The former coal-fired power station was previously controlled by Treasury Holdings, an Irish development company that was formerly run by Mr Ronan and his then business partner Richard Barrett.

Treasury developed a master plan for the property but it was effectively credit crunched following the economic crash in 2008, with the Irish developer being wound up on foot of a court application by KBC Bank Ireland. Its loans relating to Battersea were held by both Nama and Lloyds Banking Group.

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“We were stunned when the administrators were appointed in 2011 and Nama sold it to the Malaysian consortium led by SP Setia, whom we had brought in as our joint venture partner and which is now building our scheme,” Mr Ronan said.

He added that it was satisfying to see the scheme being built but “obviously it is a major lost opportunity for us and the Irish taxpayer”.

Nama declined to comment on Mr Ronan’s comments.

Mr Ronan described the Battersea development as “the development of the decade” in spite of a slowdown in the growth of property prices in London and with Brexit looming.

“Battersea Power Station is and will be the success we always knew it would be,” he said.

Brexit

Separately, the Irish developer predicted that Brexit had the potential to be an opportunity for Ireland. “We are seeing the trickle of jobs being moved from London to Dublin turn into a stream, albeit a small one so far, and that is good for Ireland,” he said.

That Ireland will be the only English-speaking country in the European Union after Brexit “should reinforce its place as a leading foreign direct investment destination”.

There are opportunities to be had once again in the property market in Ireland, according to Mr Ronan due to the undersupply of property. “There are opportunities to develop new buildings profitably in almost every sector,” he said.

The main areas for opportunities are the student and private rental sectors and Mr Ronan said he believed there was “space for a small number of true five-star hotels”.

However, he cited limits on heights and density in Dublin as a challenge for property developers, along with the low availability of reasonably-priced capital, which is a “scarce commodity”.

His company, Ronan Group Real Estate, is hoping to bring on new long-term investors into the Dublin market. “We are constantly meeting new institutional investors from all over the world who are looking at Dublin opportunities for the first time,” he said.

Mr Ronan described Ireland’s main domestic banks as “capital constrained” and “risk adverse” and added that “getting back into financing the development market when it’s undersupplied with capital would be the right thing for them to do”.

He said his worst business decision was not buying the freehold of New York’s Empire State Building in the early 1980s. He said his company had an opportunity to buy the freehold of the famous building but bid $500,000 less than the winning bid.