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Bank of Ireland snaps up hotel tycoon Paddy McKillen's loans

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Claridges

Claridges

Paddy McKillen

Paddy McKillen

The Berkeley

The Berkeley

The Connaught

The Connaught

McKillen also owns the Waterfront Plaza in Belfast, whose anchor tenant is US accountancy  giant PWC

McKillen also owns the Waterfront Plaza in Belfast, whose anchor tenant is US accountancy giant PWC

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Claridges

Belfast-born developer Paddy McKillen has refinanced his former £110m Ulster Bank loan portfolio - with Bank of Ireland.

Mr McKillen, the colourful character behind Belfast Office Properties Ltd, and partner Padraig Drayne, have remortgaged their multi-million pound borrowings, which had been part of Ulster Bank's Project Achill - the huge loan portfolio being sold by the bank.

The assets affected by the refinancing include Waterfront Plaza in Belfast, whose anchor tenant is PwC, Ards Shopping Centre, Glasgow's Forge Shopping Centre and Mallusk Industrial Estate in Newtownabbey.

Mr McKillen – who part-owns three of London's most historic hotels and is partner in U2's Clarence Hotel in Dublin – said the refinancing followed a "very turbulent period".

The move follows the refinancing in September of Belfast Office Properties' debts on a shopping centre in England.

The deal means that all the entrepreneur's Irish borrowings have been refinanced – though his ownership of Claridges, the Connaught and Berkeley hotels remains the subject of a court battle with the Barclay brothers, owners of the Daily Telegraph.

Mr McKillen told the Irish Times: "We have worked tirelessly since the economic crash to refinance our debt.

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"Our business has always been robust and profitable and we have strengthened and grown it since the downturn began.

"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."

It is thought some of that growth could include more investment in the Republic of Ireland – and two years ago Belfast Office Properties won planning permission for an extension to Ards Shopping Centre.

In the past, he's been more focused on expanding his interests in London, California and in other international markets.

Conor Devine of property advisory partnership, GDP, said the deal appeared a positive one for investments of this nature.

"I found it very interesting that Bank of Ireland, who for the most part have not been lending on real estate opportunities since the crash, have got involved in this trade," he said.

"My own view would be that this is a positive development for the local property market in that a local bank appears to have their appetite back to support local developers and investors.

"This can only be a very positive development in this marketplace and is a sign that things are improving in our real estate market.

"There are genuine concerns in the marketplace right now as to how aggressive these private equity funds are going to be with local borrowers."

He added: "I think Bank Of Ireland have demonstrated over the years that they have a different business model to that of the vulture funds, so I think it would be fair to assume that Bank of Ireland buying loans would present a more stable environment for any investors affected."

No one from Bank of Ireland or Ulster Bank would comment on the refinancing.


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