THE NATIONAL Asset Management Agency (Nama) yesterday took control of 15 properties that have debts involving developer Paddy Kelly.
Kieran Wallace of KPMG has been appointed as statutory receiver to nine hotels and suites of rooms, while estate agent Savills has been appointed as “property receiver” to a number of non-hotel assets.
Mr Wallace has been given control of the following hotels: the Marriott in Ashbourne, Co Meath; the Days Inn in Talbot Street, Dublin; the Clarions in the IFSC, Dublin airport, Liffey Valley and Limerick; and the Maldron in Citywest, Dublin.
In the case of Liffey Valley, Mr Wallace has been appointed both to the property operating as a hotel and the company running the site. This is a joint venture involving developer Seán Lyne and Choice Hotels.
He has also taken control of suites at the Maldron Hotels in Cardiff Lane, Dublin, and Limerick city. In the case of the Limerick property this involves five two-bed apartments.
Savills has taken over a number of other assets. Among them is the Smurfit Kappa head office in Clonskeagh, a land bank in Drimnagh and units in Smithfield, including shops operated by Paddy Power and Polonez.
Savills is expected to seek to bring these properties to market in the near future.
While property receivers are widely used in the UK, they are not common in Ireland. But Nama has chosen to go this route as they represent a potentially cheaper option to using traditional insolvency practitioners.
Mr Wallace has been appointed to the hotels due to the complexity of the ownership issues involved.
The loans are held by more than 100 borrowers who were part of syndicates put together by Mr Kelly to fund the developments
For example, the Maldron in Cardiff Lane is owned by 86 investors, each of whom owned a certain number of bedrooms at the hotel.
Mr Wallace said it would be “business as usual” for the hotels for now. “I look forward to working alongside the various operators over the coming months to assess the options for each of the properties going forward,” he added.
It is understood the loans relating to the Clarion and Maldron hotels amount to about €283 million.
No comment was available from Mr Kelly yesterday.
It is believed that family members of Mr Kelly are among the borrowers, including his son Simon and brother Liam.
The Clarion hotels are operated under management contracts by a company called Kasterlee Ltd, which is led by hotelier Frankie Whelehan.
Mr Whelehan, who is one of the borrowers concerned, said the hotels would continue to operate as normal.
“This just means we have new owners, ie Nama,” he said.
Mr Whelehan said Kasterlee increased its revenues last year by 4 per cent to €72 million.
The company also operates Clarions in Sligo and Cork, other properties in Ireland and has interests in Germany. Mr Whelehan said Kasterlee “broke even” last year and, with the help of rent reductions of up to 30 per cent in some cases, should return to profitability this year.
Pat McCann, who leads the Maldron three-star hotel chain, said there would be “no change” to the way the hotels are operated by the company. He said the Maldrons have performed “reasonably okay” in 2011, adding that trade has been a “bit better than last year”.
Mr Wallace is expected to seek to sell the hotel assets at some point in the future. It is not clear if Nama will then pursue the borrowers for any shortfall between the sale price and the loan amounts.
