London: declining values

Irish construction group McAleer & Rushe has sold a site on Baker Street in London's West End for €33m, four years after it bought the site from a British developer for a reported €65m at current exchange rates.

McAleer & Rushe will remain on as contractor for the redevelopment of the site which is to have offices with shops on the ground floor. The redevelopment is expected to cost British Land a total of €114m, including the cost of buying the land, and will be finished in 2013. McAleer & Rushe will have a share of the development profits, reports stated.

McAleer & Rushe bought the site with a loan of about £40m from Bank of Ireland. It then secured planning consent for a 140,000sq ft office scheme, designed by architect Jestico & Whiles.

Property Week reported that Irish banking sources said the loan had already been written down by Bank of Ireland to around €35m before it was sold to British Land.