The Irish property industry is fighting back. Fed up with shouldering the blame for the country’s financial woes, it is turning to the courts as it bids to repair its battered reputation.
The Irish Property Council wants the state, regulators and banks to accept responsibility for the sector’s collapse. And to try to make that happen, the organisation, which represents investors and developers, is looking to launch a class action against Ireland’s Financial Regulator.
Blaming the reckless behaviour of banks and the incompetence of the regulatory authorities, it wants to be compensated – if not financially, then reputationally.
For any chance of success it needs a headline case. If it is armed only with a collection of grievances – and it claims to have more than 100 – its chances of victory would be slim. So the coming weeks and months will be about identifying that single, compelling case and a single plaintiff.
But there the challenges begin. The case would need to capture the public imagination. It would need to demonstrate that the banks involved were cavalier in their lending practices. And it would need to prove that regulators were demonstrably negligent in the checks and balances they imposed.
That’s quite a checklist. And while many may instinctively sympathise with those arguments, proving it is a different matter altogether.
There’s another nagging question thrown up by the whole process. Patrick Fitzgerald , director and legal advisor at the PIC, says: “We just want to identify that the borrowers had nothing to do with the collapse.”
Now that is going to be tough to demonstrate.
Assembling an argument that one party is shouldering a disproportionate share of the blame for Ireland’s property woes is one thing. Demonstrating that borrowers had “nothing to do with the collapse” in a debt-fuelled market is another altogether.
It should be a good row.
It is inevitable in a fragile market that there is heightened focus on where real opportunity lies. Increasingly in a UK context, it’s London. It is a strategy that Great Portland Estates chief executive Toby Courtauld has pursued to rewarding effect in recent years. Others are coming to the same view. Neil Jones, co-founder of Centre Point owner Almacantar, is leaving the business to allow it to focus on the capital. He will pursue opportunities in continental Europe; his co-founder Mike Hussey will dedicate himself to London.
Argent is doing the same. It said this week it would now focus its efforts on its 8m sq ft redevelopment in King’s Cross, albeit with a 273,000 sq ft sideline at One St Peter’s Square in Manchester.
As a result of Argent’s review, board directors Gary Taylor and Stephen Tillman are leaving the firm to set up their own business, taking forward Argent schemes at Paradise Circus in Birmingham and the 1,000-acre land reclamation scheme Ffos-y-Fran in Merthyr Tydfil, South Wales. Argent will retain a part ownership in both schemes.
So it’s not all about the capital. But, increasingly, it is about focus. Put simply: it’s a story that investors can easily understand.
Estates Gazette has teamed up with Colliers International to launch a regular poll that will test the temperature of the UK property market. Some of you have already joined our Big Question panel and the first question – around the future of our town centres – will be in your inboxes any time now. For those of you who haven’t yet joined the panel, you can do so at www.estatesgazette.com/bigquestion.
We are particularly interested in the views of occupiers, though all are welcome to participate. The results will be published every two weeks in print and online.
