Anglo investments lost €140m in 2010

ANGLO IRISH BANK didn’t just make a mess of lending to developers, it made a mess of its own property investments too.

The bank’s annual report shows it lost €140 million last year on property investments it bought to syndicate to private investors, but failed to do so leaving the taxpayer on the hook.

The properties fell €131m in value last year, and an additional €9m was lost on interest rate swaps related to the properties.

The losses are on top of the €300m lost by the bank between September 2008 and the end of 2009 on its property investments, bringing total losses to €440m. The bank says it is trying to restructure these investments.

Anglo splashed out €615m on investment property in Ireland and Britain for one of its funds.

Amongst them was the acquisition of a 90% stake in a retail scheme on South King Street from Joe O’Reilly, one of the Dundrum Town Centre developers and one of the group of shareholders assembled by Anglo to buy a share in the bank from Sean Quinn.

They agreed to buy the stake for about €100m, or a yield of 2.9%, when costs were taken into account. The yield is the rent expressed as a percentage of the purchase price and meant Anglo paid the same yield for an unproven shopping complex on a secondary street in Dublin as investors were paying last year for prime properties on Bond Street in London.

Last year, for example, Paddy McKillen sold the Omega unit on Bond Street for a net initial yield of 2.9%, the same as what Anglo’s private banking division paid for the stake in South King Street.