Paddy McKillen refinances Ulster Bank debts

Developer and partner had BoI support in completing their Ulster Bank borrowings

Developer Paddy McKillen: “This refinance marks the end of a very turbulent period that began when the banks became destabilised.” Photograph: Yui Mok/PA Wire

Developer Paddy McKillen and his business partner Padraig Drayne have completed the refinancing of £110 million (€140 million) of their borrowings from Ulster Bank with the support of Bank of Ireland.

Mr McKillen said the refinancing, which closed at the end of last week, was the “end of a very turbulent period” and that he has now refinanced all of his Irish banking borrowings.

The Belfast-born developer said his business empire was now positioned for expansion. “We have worked tirelessly since the economic crash to refinance our debt. Our business has always been robust and profitable and we have strengthened and grown it since the downturn began,” he said.

“This refinance marks the end of a very turbulent period that began when the banks became destabilised. We look forward to sustainable growth over the coming years.”



Commenting on the refinance Mr McKillen and Mr Drayne said jointly they were pleased that the Ulster Bank debt had been refinanced with Bank of



“It builds on the very good relationship we have with Bank of Ireland for almost 30 years.”

The loans were owed by a company called Belfast Office Properties Ltd. The emergence of Bank of Ireland as the property investors' backer means that the entire £221 million senior debt of this company is now owed to it.


The properties in this Northern Irish portfolio includes the Forge Shopping Centre in Glasgow and The Ards Shopping Centre in Newtownards, on the outskirts of Belfast. It also includes the Mallusk Industrial Estate in

Newton Abbey

and the Waterfront Plaza in Belfast where tenants include accountants PricewaterhouseCoopers.

CoStar News, a specialist financial information service, reported that Bank of Ireland paid in the low 90 pence in the pound for the £110.5 million loan. The entire portfolio has an annual rent roll of €10.65 million, while the net rental income is €8.59 million.

Mr McKillen and Mr Drayne declined to comment on the details of the deal.

In March Mr McKillen refinanced hundreds of millions of euro of personal and company loans owed to IBRC, the former Anglo Irish Bank, with the support of Colony Capital, an American multibillion fund led by Tom Barrack. He is also understood to have reached agreements on refinancing his debts with AIB.

Mr McKillen is now known to be actively investing in Ireland, having almost entirely withdrawn from it during the boom in favour of London, California and other international markets.

Colony Capital and Development Securities, a British plc, are among his partners in these investments.

In London, he is locked in a long-running battle for the control of three hotels: Claridge's and the Connaught in Mayfair, and the Berkeley in Knightsbridge with the Barclay brothers and their cohort financier Derek Quinlan.

Mr McKillen described the brothers in a recent interview as “out to make a quick buck. Highly aggressive. And philistines...” Mr McKillen’s claims have been rejected by the twin brothers.

Coroin, the company that owns the hotels, made a profit of £7.78 million (€9.8 million) last year, according to accounts filed in the UK. The hotel's operations generated profits of £44.33 million, almost 6 per cent more than the £41.73 million it made in 2012, the year London hosted the Olympics.