Northern Ireland

£26m pre-tax loss for Bangor shopping mall

Bow Street Mall, Lisburn
Image caption The company also owns Bow Street Mall in Lisburn

The property firm which owns the Bloomfield shopping centre in Bangor has announced a £26m pre-tax loss for 2010.

Donegall Place Investments in Belfast also owns Bow Street Mall in Lisburn.

The company has also written down the value of its properties by £97m, giving a total loss for the year of £123m.

Almost all major property firms across Ireland have had to write down the value of their assets as a result of the property crash.

The auditors of Donegall Place Investments said there was still some uncertainty about the value of the firm's assets as the revaluation was carried out by the directors rather than an independent surveyor.

The firm now has gross assets of about £340m compared to around £460m in 2009.

Major franchise

It has bank loans of £297m from Bank of Ireland, AIB and Ulster Bank.

The company is owned by Pat McCormack who also has licensed trade interests, and Lebreh Ltd, which is associated with the property investor Michael Herbert, who owns a major Kentucky Fried Chicken franchise.

The firm's accounts state that it has decided to pull out of a joint venture with the McGinnis house-building group and write off the value of their investment in that project.

A note in the Donegall Place Investments accounts states that the directors of the firm are of the opinion that Dermont Developments is "no longer trading as a going concern" and that they are withdrawing support from the joint venture.

The accounts suggests that after selling their stake in the project and writing off a loan and bank guarantee, their involvement in the venture returned a loss of about £12m. Mortgages registered with Companies House suggests the project related to a site at Rathgael in Bangor.

In 2009 the two firms teamed up, via a completely different company called Dermont LLP, to take control of an 87-acre land bank which had been owned by the failed Taggart house-building group. This is unaffected by today's move.

At the time Mr McCormack issued a statement saying "the corner is ready to be turned" in the property market.

He said: "The time has come for the Northern Ireland economy to lift itself out of the gloom and for people to realise that the sky is not going to fall in.

"We have made a major investment because we believe in Northern Ireland and its people and we believe that prices are now at a point where people will have the confidence and the ability to re-enter the market.

Relentless

"We are buying and building for the future and we have no fears that the corner is ready to be turned."

However, over the past three years the housing market has followed a relentless downward path.

The company is still participating in a second joint venture, Merset Properties, where their partners are two other wealthy developers, Frank Boyd and Andrew Creighton.

Meanwhile, Lebreh has also reported its results for 2010 as has Mr Herbert's fast food business which trades as Herbel Restaurants.

The restaurant business, which employs around 350 people, made a pre-tax profit of £824,000 on turnover of £34m which compares to a £705,000 loss the year before.

Lebreh showed a pre-tax loss of £14m, mainly reflecting its share of the Donegall Place Investments losses.

A note in the account states that Mr Herbert no longer owns Lebreh with his wife Lesley now controlling 100% of the company's share capital.

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