Northern Ireland

Bank set to lose over £22m on Belfast's Obel building

Obel building
Image caption The Obel is Belfast's tallest building

The failure of the property company that developed the Obel building in Belfast is set to cost a bank at least £22m.

The Obel complex was effectively repossessed in November 2012.

The former Bank of Scotland Ireland (BoSI), which is owed almost £48m, appointed administrators to Donegall Quay Ltd.

A statement of affairs submitted by the directors suggests that the bank will only get back £25m.

BoSI has been effectively shut down by its parent company, Lloyds Banking Group, and its loan book is being aggressively wound down.

The bank was one of the largest property lenders across Ireland during the bubble years.

Its lending practices have lead to enormous losses.

In November 2012, Lloyds sold £1.47bn of BoSI loans to an investment company for just £149m, equating to a 90% loss.

The Obel consists of a 28-storey residential tower and an adjoining six-storey office block.

It was launched onto the market in 2005 and dozens of apartments were sold off plan, mainly to buy-to-let investors.

However as the property market crashed sales slowed and many of the apartments are still empty.

Most of the office block is let to the international law firm Allen & Overy.

The Obel project was originally backed by a consortium of developers, but in 2008 the Blackbourne family took full control, buying out their partners with the backing of BoSI.

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