Irish Rescue Bank Recovers Funds in Sale to Google

The agency set up to purge Ireland’s banks of risky commercial real-estate loans said it will recover all the taxpayer money that was invested in a Dublin office tower being sold to Google Inc.

The U.S. Internet search service agreed to purchase the 15-story Montevetro building for 99.9 million euros ($136 million), the property’s developer, Real Estate Opportunities Plc, said in a statement today. Ireland’s National Asset Management Agency will get back more than it paid for the loan backed by the office building and additional funding advanced to REO to complete it, NAMA said in a separate statement.

NAMA was established after the collapse of Ireland’s property market saddled lenders with bad debts, forcing the state to accept an 85 billion-euro rescue package last year. The agency had acquired loans with a face value of 71.2 billion euros for a price of 30.2 billion euros by the end of 2010. It also approved advances of 592 million euros to fund developments including Montevetro, NAMA said.

“It is a very small step along a very long road,” said Austin Hughes, chief economist with Dublin-based KBC Bank Ireland. “It’s important we get transactions going and enable visibility to rebuild the property market.”

Delays in property transactions related to NAMA have hurt the economy, according to Hughes. Ireland’s economy probably contracted for a third year in 2010, as investment in building and construction dropped by 32 percent, the central bank said last month.

Taxpayer Benefit

The sale “will be seen as a very positive sign for the future of the Irish commercial property market,” NAMA Chairman Frank Daly said in the statement. “It is an excellent example of NAMA’s ability to enhance the value of its assets for the benefit of taxpayers.”

NAMA will repay 250 million euros of senior securities known as NAMA bonds, a first for the agency, it said today.

The Montevetro tower is the tallest commercial building in Dublin and has 210,000 square feet (19,510 square meters) of prime office space, Google said in a separate statement. The purchase will help support future operations for the Mountain View, California-based company, which has its European headquarters in Dublin.

Google Chief Executive Officer Eric Schmidt said in January that the company plans to add more than 1,000 jobs in Europe this year.

REO, owned by Irish millionaires Richard Barrett and John Ronan, won U.K. government approval this month to redevelop the Battersea Power Station in London. The company plans to build 3,400 homes and 330,000 square meters of commercial space on the site. NAMA also owns loans secured by that project.

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