Last week, the multiple holders of £153m of securitised debt – lent originally by Lehman Brothers to Mark Morris and Maurice Golker, to buy five properties in EC3 – agreed not to press for a return of their capital, due to be repaid about now. One day, someday, the creditors’ patience might be rewarded.
Morris and Golker nursed rich private clients at Jones Lang LaSalle until 2002, when they left to make some money of their own. With the assistance of Lehmans, the pair pieced together a group of properties that make up the 2.8-acre plot bounded by Leadenhall, Fenchurch and Billiter Streets.
Then, Deutsche Bank called in early 2007. The Germans wanted to build a 1.3m sq ft HQ building on the plot. Crikey! Morris and Golker must have been two happy bunnies. US architect Kohn Pederson Fox was commissioned in great secrecy to draw up the plans.
The unpublished drawings show a 27-storey, light-stone and glass tower, adjoining a six-storey groundscraper. There were five huge trading floors, each of 77,000 sq ft, each able to accommodate 1,200 traders. But the credit crunch spooked Deutsche, which pulled away in April 2008, with a half-promise to reconsider.
Morris and Golker ploughed on with a smaller scheme to fit Any Old Mega-Bank. These designs were due to be submitted for planning last summer. But the pair began to fret and concluded, actually, er… no, let’s not do this.
A leading City planner thinks the Leadenhall triangle is one of only two spots left in the Square Mile with sufficient footprint for a mega-bank. It would be nice to think that Deutsche would honour its half-promise, but the German bank has a long history of dithering over its London property requirements.
The Americans are a bit shell-shocked right now. So, how about a nice Chinese or Indian mega-bank? Well, perhaps, one day, someday
You couldn’t make it up
Heard of Paddy Shovlin? No? Don’t worry. Few on the right-hand side of the Irish Sea have.
But your man fronted a £949m bid for the 12.8-acre Chelsea Barracks in 2006, only narrowly topped by the Qataris – who must now wish they had lost, as the site is worth no more than £500m today.
So that’s a £449m loss that Ireland’s National Asset Management Agency doesn’t have to fret over. But it seems NAMA has other business with Shovlin, who was named last week as one of the next raft of developers with loans transferring to NAMA.
The next bit you simply could not make up.
In 2006, a Shovlin-led consortium bought the Bank of Ireland’s HQ in Baggot Street, Dublin, for €200m, who fortunately did not provide the mortgage. It hardly needs to be said who provided the mortgage. Bank of Ireland is now, of course, in the deepest of trouble for lending so much money to property developers. So much so that it is to move out of its own unaffordable headquarters, thus ensuring the loan on their building is even further underwater.
You’ve had the smooth…
A point raised by Grosvenor UK chief Peter Vernon on Tuesday will send a tremor through those now collecting rents from government departments under the multi-billion-pound property outsourcing contracts set up by Labour.
Take the PRIME contract under which Trillium took over the huge Department of Social Security property portfolio in 2000. A quick look shows that the government can downsize its PRIME holdings by 40% without paying huge lease break penalties.
Vernon helped negotiate that contract for Trillium when he was a management consultant. I asked him during a staged interview at Hogan Lovells if he thought these outsourcing deals would make it easier for David Cameron to cut the government’s property holdings – and wouldn’t this be bad news for those now holding the leases. “Yes, indeed,” he replied. “But they’ve done pretty well out of the deal over the past 10 years.”
Former EG editor Peter Bill contributes to estatesgazette.com/blogs
