LONDON (Reuters) - Developer Ballymore is hunting for a partner to help finance and develop projects to build 3,000 homes in London, as Irish banks retreat from property lending following the financial crisis.
Dublin-based Ballymore, which is developing the Nine Elms area around the new U.S. embassy on the south bank of London’s River Thames, said the projects included of one next to the embassy, and two others - Arrowhead Quay and London City Island - near the Canary Wharf financial district in east London.
The projects, which will also contain 250,000 square feet of offices, shops and leisure facilities, together have a gross development value of 2 billion pounds, it said. It has appointed property consultancy CBRE and financial advisor Lazard to advise on the search.
“Over the last 30 years, not all but certainly most of our projects would have been funded by the Irish banks, and clearly that source of funding since the financial crisis is no longer there,” John Mulryan, managing director of Ballymore’s UK business, told Reuters.
“We’re now looking for a new strategic partner to help us finance and develop out some major projects in London... What most people recognise is that there’s a fundamental lack of supply in the market.”
Ballymore will be the projects’ development manager and will look to keep an equity stake in the schemes, he said. Possible investment partners could include pension funds and private equity firms from Britain, the United States and Asia, he said.
Irish state-run bank the National Asset Management Agency has been Ballymore’s main funder since 2010.
House prices in the British capital have stormed past their 2007 peak as large numbers of foreign and local buyers compete for a limited pool of properties, fuelling fears of a property bubble.
Reporting by Brenda Goh; editing by Tom Pfeiffer