Land values: Michael Fingleton, Nationwide's chief executive. The building society is the major shareholder in a London development where land prices are falling

Michael Fingleton's Irish Nationwide is the majority shareholder in a property development company that owns significant amounts of land in London's docklands, where land prices have been falling sharply, according to documents lodged with Companies House in Britain.

The building society had its credit rating cut by Moody's and Fitch in recent weeks because of its exposure to commercial and residential property lending in Ireland and Britain, a downgrade the society said it "fundamentally disagrees" with.

The building society owns a 51% stake in development company Clearstorm, according to Companies House filings, which is planning to develop towers at Leamouth and Minoco Wharf in London's docklands, along with joint venture partner Ballymore Properties. Press statements from Ballymore had previously described the company as one its subsidiaries.

Land prices in the docklands in London have fallen sharply since the downturn in the housing market in Britain.

In 2006, Clearstorm created two charges over leasehold properties at Orchard Place in Leamouth in London. In May of last year, planning permission was granted to develop a series of towers on land there, the tallest of which will be 85 metres and the smallest 44 metres, two-thirds the height of Liberty Hall.

In June of that year, Clearstorm, along with Ballymore itself and GOGB, which is part of Gulf Oil, created a charge, subject to a deed of covenant, on land at Minoco Wharf in the city's Royal Docks, according to documents lodged with Companies House. Land Registry documents show Irish Nationwide and GOGB were the lenders of the £33m used to acquire the site.

Earlier this year, the company was granted planning permission for 2,600 residential units, shops, restaurants, a marina and cafes on the site.

Clearstorm's accounts for the year ended 31 December 2005 show it made a loss of more than £9m, up from £3.6m the previous year.

The company was developing a number of sites "and had incurred losses pending the generation of revenues".

Current assets more than doubled to £71.64m during the year, up from £35m. Creditors were owed more than £85m and the company had future commitments to pay £12m for development land "when certain milestones are achieved", while "additional amounts may become payable to property vendors in the event that specified density targets are achieved".

Irish Nationwide chief executive Michael Fingleton is generally credited with starting the trend of financial institutions taking stakes in developments.

The building society and Anglo Irish Bank, which is trying to purchase it, share clients including Treasury Holdings, Newlyn Developments and Liam Carroll. Developer Seán Dunne is also a significant client of Irish Nationwide.

Ballymore and Irish Nationwide had not returned calls seeking comment at the time of writing.

Meanwhile, Vernia, an Irish-registered property company owned by Irish Nationwide, had shareholders' funds of more than €23.6m at the end of last year.

The company was once given a €12.7m mortgage by developer Gerry Gannon to buy land in north Dublin, an unusual reversal of the normal trend. That mortgage has not been satisfied, according to the Companies Office.

Irish Nationwide also owns other property companies. Cedarclose had a shareholders' deficit of more than €3.77m at the end of last year while Pangrove owned more than 36 acres of land at Pelletstown, now known as Ashtown, off the Navan Road in Dublin.

The charge on that land has been only partly satisfied, according to documents lodged with the Companies Office. Despite that, shareholders' funds stood at €13.2m on 31 December 2007.