Investors who piled €52m into an ill-fated land deal at the height of the boom have been offered €800,000 to release their security over the lands.
Investors, assembled by stockbroker Davy, backed developer Joe O’Reilly’s Castlethorn in his purchase of 24.5 acres at Woodbrook in south Dublin in 2006. O’Reilly purchased the lands for a reported €160m from Sir Marc Cochrane.
The land was acquired with a mix of investor equity loan stock and senior debt from Ulster Bank. Castlethorn has secured planning for 537 homes on the site.
In the aftermath of the property crash, the investor interest in the lands was written down to zero, and last year Ulster Bank sold loans as part of Project Clear.The senior debt is now registered in the name of the quoted house builder Cairn Homes.
Investors were last week surprised to receive a letter from Davy stating that the firm had been approached by Castlethorn requesting that they release all security over the lands.
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The letter said that the investor security had “no economic value” as it ranked behind other charge holders.
The security did have some “contingent value” as any future refinancing of the development land would require the consent of the investors or the appointment of a receiver.
The value of the Woodbrook lands received a considerable boost earlier this year when it was announced that a new Dart station was to be built in the area.
In 2013, Castlethorn agreed a deal with Dun Laoghaire-Rathdown county council to swap the former Shanganagh prison for 11 acres of land by the train line.