Belfast Telegraph

Be smart and act quickly or you risk finishing up in Room 101

If your loan has been sold, you need a new capital partner to help you hang on to your properties and your business

By Conor Devine

The well-known radio and television series Room 101 has been on our screens since 1992. In the show, celebrities are invited to discuss their pet hates and persuade the host to consign them to oblivion in Room 101.

The name is inspired by the torture room of the novel 'Nineteen Eighty-Four,' which reputedly contained the 'worst thing in the world'. George Orwell named it after a meeting in Broadcasting House where he would sit through tedious meetings.

Although I don't have very many pet hates, there are those in the property sector who would like to consign some things to oblivion in Room 101.

Looking at the current Irish property market, the last 18 months have been exceptionally difficult, with over £30bn of par debt property loans having been sold in Ireland.

To date Nama has been to the forefront of these transactions, and in the next couple of weeks it's likely that their latest trade, Project Arrow, which comprises over €7bn (£5bn) of property loans, will take place.

We are now entering stage two in the Irish property crisis.

Stage one was dominated by Nama and the Irish banks trying to deal with borrowers.

This new phase involves private equity companies like Cerberus, Loanstar and Apollo, to name a few, dominating what is going on in the real estate markets across the country.

In Dublin, property agents are busier now than during the time of the Celtic Tiger and their work is being driven by funds that are trying to offload properties they acquired through the non-performing loan trades.

What does this mean for the borrower?

It's very simple. If your loan has been sold, you have a certain period of time to find a new capital partner to help you retain ownership of your properties and your business.

The funds are very powerful, have most of the professional network tied up in the country, so as a borrower you can be on weak ground, with limited time to put a proposal together.

GDP Capital acts for many borrowers who are terrified of losing their properties and their businesses. New funding has been found and allowed some of our clients to refinance away from private equity.

Despite what our banks are saying publicly, funding and finance is difficult.

Like many things in life, it comes down to knowledge and education. Find a new capital partner, take expert advice from people who have a track record in this space, and get on with it.

Do not procrastinate with the funds, or you and your business will be consigned to Room 101.

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.