Cracks appear in a property empire stretching from Dublin to China

BACKGROUND:NEWS FROM Real Estate Opportunities (REO) that it plans to spin off Battersea power station having booked a loss of close to £1 billion (€1.2 billion) for the 14 months to the end of February has thrown the spotlight on the financial health of the company, and that of Treasury Holdings, its majority shareholder.

Since the National Asset Management Agency (Nama) was launched, REO has been remarkably open and upbeat about its role in the process. The message from managing director John Bruder has been that, although the company’s loans will be among the first to transfer to Nama, none of the loans are distressed and overall Nama is a good thing both for the company and the economy. Yesterday’s announcement suggests that cracks may be beginning to show in the Treasury Holdings property empire.

Treasury Holdings – the linchpin of the extensive property empire owned by developers Johnny Ronan and Richard Barrett – was formed in 1989 by the two men. The pair had known each other from their school days at Dublin’s Castleknock College and throughout the 1980s both had been separately buying sites around the capital. The company rapidly built up a property portfolio stretching from Ireland into Britain and China. One of its earliest projects was the landmark Treasury Building on Grand Canal Street in Dublin, which, in an ironic twist, was to become the future home of Nama.

A significant portion of Treasury’s property interests are held through the company’s shareholding in two separate companies – Real Estate Opportunities and Treasury China Trust (Formerly China Real Estate Opportunities).

Incorporated in Jersey, REO is listed on the London and Dublin stock exchanges. Treasury Holdings has a 67 per cent shareholding in the company. As well as the flagship Battersea station, REO owns a large number of commercial and retail properties, including the Central Park complex close to Leopardstown in Dublin, the Stillorgan shopping centre and the Springcross development in Ballymun.

Treasury’s property interests in China are held through its shareholding in China Real Estate Opportunities which was renamed Treasury China Trust this week ahead of its imminent move to the Singapore stock exchange from London’s AIM. Treasury opened an office in Shanghai in 2005. Two years later CREO was formed and listed on the London AIM market. Treasury and related parties control 41 per cent of the company.

In addition to their shareholdings in REO and Treasury China Trust, Ronan and Barrett have property interests through Treasury Holdings and their own companies. Among the properties controlled by Treasury Holdings are Spencer Dock and the National Convention Centre.