It is amazing just how much demolition Owen has been allowed to do on 2 Shrewsbury Road. There are people in Killiney / Dalkey sweating over really small things with planners, but in 2 Shrewsbury Road, they have demolished most of the period house ?
The key phrase in the company’s recent disclosure regarding Owen’s 16m share sale was “collateral”.
If you are a company CEO/CFO with shares (or have a liquid share portfolio), you can get financing at a cost of about 1-1.5% per annum for up to 70-80% of the face value of the shares. The quid-pro-quo is that these facilities can be withdrawn with less than 3 months notice (i.e. they are not mortgages, but more like rolling short-term loans - 2007 deja vu), AND that when the “collateral” (i.e. shares) drops below a certain level, the bank has the right to automatically sell the shares itself in open market.
You can get these loans from any major private banking type operation (Goldman, Barclays, Deutsche, Bank of America etc.). People have been using these loans (called “portfolio finance”) to finance houses, cars, etc. all over the place. I have seen a couple of high-end D4/D6 Dublin houses financed in this way over the last few years. In most cases, the borrower is a “financial type” (i.e ex. trader or investor), or CEO/CFO type.
Obviously this is 2007 “on speed”, and in a major world collapse, would really add fuel to the fire, with forced sales.
I always felt the original sale of 2 Shrewsbury was a cracking deal (should never have sold below even 5m), and the 6.5m would have been a 30% rise on this, which would have been in line with the rise in the general D4 market from the time the original sale was agreed, to the flip to Owen. In fact, I’m not sure that the general high-end D4 market has made much progress since that mini-peak in mid-2013 to mid-2014. Therefore, it would be a stretch to get anything over 6.5m for this now. Particularly, given that the level of extreme demolition has committed Owen to following the ultra expensive re-fit that Max did on another hedge fund manager’s house down that road (i.e. rebuilding and restoring full block-work period walls and period window features). This is +600 sq ft type stuff (as is building deep basements with extensive reinforcement and waterproofing. This is a +4-6m project.
He could always get Knight Frank who would put it up for 10m, and try to hawk it via their UK buyer base !
Alternatively, there is the option of conversion into apartments (per neighboring block), which could justify 6m. However, don’t know if that would get planning here (I don’t know what is left to protect anyway ?).
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