CENTRAL BANK WARNS OFFSHORE MONEY RAISES BOOM-BUST PROPERTY CYCLE RISKS - The dominance of offshore money in Ireland's commercial property market - including retail sector landlords and so-called cuckoo funds snapping up entire apartment blocks - creates new risks they will import boom-bust cycles, sink house prices and weaken the banks, new research from the Central Bank shows.
The warning comes as two of the biggest property investors here since the crash, Green Reit and Starwood Capital, look to sell their vast holdings of mostly office blocks. The Central Bank said foreign-financed funds are more vulnerable to negative shocks outside Ireland - and may be more tempted to dump Irish assets in a hurry to pursue easier profits elsewhere or to meet obligations at home, says the Irish Independent. "In general, the growing presence of non-bank investors to the Irish commercial real estate (CRE) market is welcome in terms of the diversification of funding sources," the report said. "However, it has the capacity to have a negative impact on financial stability. Real estate investment funds (Reifs) with high leverage or high liquidity mismatch may try to sell off their assets in times of stress. Funds with high leverage may be required to sell assets if the cost of debt rises; for example, if global risk is repriced." The report provided the most detailed breakdown to date of institutional ownership of CRE. It found that Reifs and real estate investment trusts (Reits) mostly have financed their Irish acquisitions using equity or loans provided by shareholders or non-bank sources, with about half of the finance coming from overseas.
TOURISM IRELAND REJECTS PAISLEY CLAIM IT FAVOURS REPUBLIC - Tourism Ireland has strongly rejected claims by the DUP's Ian Paisley that "there is a view" it "really first and foremost has to promote the Republic of Ireland and that Northern Ireland gets second place in that".
Niall Gibbons, the chief executive of Tourism Ireland, which markets the island of Ireland overseas as a holiday destination, told Mr Paisley that this view was not correct and that the organisation "makes sure that we give a lot of prominence to Northern Ireland". Mr Gibbons resolutely defended the role of Tourism Ireland as he gave evidence on Wednesday to the Northern Ireland affairs committee at Westminster, which is conducting an inquiry on the importance of tourism to the North's economy, says the Irish Times. He told the committee that since 2002, when Tourism Ireland was established under the framework of the Belfast Agreement, nearly 30 million overseas visitors had visited Northern Ireland which had in turn generated £6.6 billion (€7.4 billion) for the Northern Ireland economy. But Mr Paisley was keen to quiz Mr Gibbons about claims that had been made by Uel Hoey, the business development director of Belfast International Airport, who previously told the committee that his airport was not supported by Tourism Ireland. Mr Hoey told the committee Tourism Ireland did a very good job "for the island of Ireland in terms of marketing and getting green lights on things on 17 March". "That brings people into Dublin. It brings people exclusively into Dublin. When they get into Dublin, they stay in Dublin," he said.
PETREL RESOURCES CONFIDENT OF FINDING DEVELOPMENT PARTNER FOR IRISH OFFSHORE EXPLORATION LICENCE - Irish exploration company Petrel Resources has expressed confidence in attracting a major oil and gas company to buy into part of its licence portfolio off the west coast.
However, it has warned that delays in granting licences and the changing political climate surrounding offshore exploration could hinder its progress, says the Irish Examiner. On the back of the company reporting a significant decline in annual losses for 2018 - from €4.4m to €239,042 - chairman John Teeling said Petrel is actively working at progressing all of its Irish interests, which cover one licensing option and two frontier exploration licences in the Porcupine Basin area off the Kerry coast. Petrel has applied to assume 100% ownership of one of its frontier exploration licences - such a licence means an operator must drill at least one exploration well - and to extend its first phase by a year. The company has also applied to transfer its licensing option into a frontier exploration licence and is set to evaluate whether to remain a 10% shareholder in another licence. Regarding the first licence mentioned, Petrel said it believes it has "a good package with which to attract a major development partner," but said it is running out of time.
LLOYDS WORKERS 'DON'T RESENT' CHIEF'S £2.85m PAY - António Horta-Osório is such a "charismatic winner" that ordinary branch staff at Lloyds Banking Group don’t mind being paid less than one-hundredth of their chief executive’s base package, incredulous MPs were told.
Stuart Sinclair, chairman of the bank’s remuneration committee, defended Mr Horta-Osório’s £2.85 million fixed package, says The Times. This comes as the Lloyds chief was accused of "greed" by members of the UK work and pensions committee and was told that his pay was "off the scale". "People like a winner," Mr Sinclair said, referring to Lloyds’ 67,000 employees. "There’s a charisma about António that actually means a lot of people say, 'Good luck to him, he works incredibly hard and I don’t resent the money.’"