Real Estate Opportunities plc,listed in London, Dublin and The Channel Islands, better known here as the debt-laden owner of Battersea Power Station, announced today that it had received full planning consent, through it 's Treasury Holdings subsidiary, for the £700million redevelopment of Ballymun Town Centre in north Dublin, close to the airport. Most of REO's assets are in the hard hit Dublin area.
At 255,000 m2, Spring Cross, as they say the development will be known, represents the largest mixed use town centre permission that has ever been granted in Ireland. The scheme includes 360 apartments, 60,000m2 of retail, 35,000m2 of offices and 11,000m2 of other uses including a substantial leisure and civic amenities offer with cinemas, bowling alleys, a public library and restaurants.
Whether Spring Cross will ever be built by REO is doubtful, as is the need for such a development in the forseeable future. The company is struggling for survival. Its interim results showed a 15% fall in the value of its assets, including Battersea Power Station, meaning its assets totalled £1.78billion. Its liabilities are £1.87billion.
REO is confident it can secure its future through rolling over and renewing loans, and that it will be supported by Ireland's National Asset Management Agency, which will take property loans under state control. But its auditors warned that there are "material uncertainties" about the business as a going concern. REO banks principally with Bank of Ireland and Bank of Scotland.
But REO is hardly a master of timing, having bought the cursed Battersea for £400million in 2006, it has ploughed considerable sums into getting planning approval for overly ambitious plans which Boris Johnson disliked, and currently it has applied to build 3,700 homes, 1.5m sq ft (139,000 sq m) of office space and 500,000 sq ft of shops, restaurants and leisure facilities, at a cost of £4billion. It also hopes to co-fund an extension of London Underground's Northern Line to the site.
English Heritage has put Battersea Power Station on its Buildings at Risk Register since John Broome, then chairman of Alton Towers, who bought the site for £1.5million in 1987 to use as a theme park, took the roof off. He sold it on to the Hong Kong developer Victor Hwang, whose Parkview owned the site between 1993 and 2006, and had argued that it should be allowed to tear down the chimneys, which it said were corroded.
REO recently said it was looking for a an equity or debt-financed partner, which would take a stake in the project, for the Battersea scheme. Peter Byers, the REO finance director, said it was "too early to comment" on the sort of partner the Battersea project could end up with but a number of sovereign wealth funds are believed to be interested.
