Quadrant’s Irish unit writes off €132m of its outstanding loans

Security: The Donnybrook House redevelopment was completed in 2018

John Mulligan

An Irish unit of US investment group Quadrant, Qrea Ireland, has slashed the value of its property investment loans in Ireland and the UK by more than €132m because of the Covid pandemic.

Qrea also had a receiver appointed last year to two Irish firms jointly owned by UK investment group U+I and US firm Colony Capital.

The move came after the two Irish firms – Development Securities Properties Donnybrook Ltd and Spectre (Ballymoss House) Ltd – defaulted on interest payments that were due last October.

Qrea held a mortgage over Development Securities Properties Donnybrook for which security included Donnybrook House in south Dublin.

Donnybrook House was redeveloped at a cost of about €16m and was relaunched in 2018.

Qrea said in accounts just filed for the financial year to the end of last June, that it took legal steps to prepare enforcement action in relation to its interests.

“McCann Fitzgerald prepared an enforcement action to retain control of the site for a potential sale or payoff of facility,” the accounts note.

“The company confirmed that Ballymoss payoff is under way and on target for early February,” it added.

Kieran Wallace of KPMG was appointed receiver to Development Securities Properties Donnybrook and Spectre (Ballymoss House) last November on foot of loans owed to Qrea.

U+I noted in interim results published last September that it had exited its involvement in its Spectre joint venture with Colony Capital with immediate effect. That resulted in U+I taking a £10.6m impairment on the venture.

“The platform was created in 2016 to redevelop commercial properties in Dublin and London,” noted U+I at the time. “The market for letting the five buildings in the platform has however been severely impacted by the lasting effects of the Covid-19 pandemic and a requirement for significant further investment to cure banking positions.”

Qrea had loans totalling €437m with borrowers at the end of last June. That compared to €490.4m at the end of the previous financial year.

It loaned an additional €192m during the 2020 financial year, but confirmed that it impaired just over €132m of outstanding loans.

“The majority of the impairment was calculated primarily in the UK retail sector on the mezzanine facilities with Parkgate, Carlisle and Westwood with further write-downs on four other facilities,” the accounts note. “There was also impairment calculated on 10 facilities in the Irish market.”

The firm said that it has agreed maturity extensions to a number of existing loans on its books.

“If the effects of Covid-19 run deeper and are more prolonged than currently expected, that could have an impact for future reporting periods of the company,” its directors warned.

“However, the directors have considered the impact of the current developments in the Covid-19 situation on the company and based on the current information available to the company are happy to continue as a going concern and will continue to monitor the situation very closely," they noted in the accounts.

Atlanta-based Quadrant Real Estate Advisors has about $1.3bn of assets under management.

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