Colony Capital eyes €120m in sales as retreat from Ireland continues

The withdrawal of US investor Colony Capital from the Irish property market continues apace with no less than four sales currently nearing completion or concluded.

Having already received €292 million last April from the sale to Blackstone of its 74 per cent controlling interests in the Burlington Plaza office complex on Burlington Road and the headquarters of Three Ireland on Sir John Rogerson's Quay, Colony is now eyeing an additional €120 million from asset disposals in Dublin 4 and the city's south docklands.

While the respective sales of Carrisbrook House, Donnybrook House and the former City Arts Centre site continue to advance, The Irish Times understands that real estate investor Mel Sutcliffe's Quanta Capital has acquired 23 Shelbourne Road in an off-market deal. Colony and its joint venture partners, the British property group U + I, offered the property to the market quietly last year at a guide price of €25 million, and are understood to have secured in the region of that figure.

Quanta Capital’s purchase of number 23 brings its footprint in Ballsbridge to two acres. In December 2019, Quanta acquired the neighbouring Shelbourne House for €40 million. Taken together, the two properties have a combined 130,000sq ft of office accommodation, and are occupied by a range of high-profile tenants including the Israeli embassy, Finance Ireland, IKEA, and the OPW.

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Outside of its latest purchase, Quanta Capital has completed more than €100 million in acquisitions so far this year, including a number of McDonald’s restaurant units and an 82-acre site at Kilpedder on the Dublin-Wicklow border, with planning permission for 700,000sq ft of data centres and capacity for an additional 700,000sq ft potentially.

While it had been suggested by property market sources last year that the proceeds from the sale of 23 Shelbourne Road would be used by Colony and its partners at U+I to refurbish and extend nearby Carrisbrook House, that plan was shelved in favour of a decision to sell the property instead. The Irish Times understands that a private investor has been selected as preferred bidder for the Pembroke Road office building on foot of an offer of around €28 million.

Should a deal proceed at that level, it would represent something of an uplift on the €23.5 million Colony and U+I paid to acquire the property in 2016. Both figures represent a relative bargain however when compared to the €46 million developers Bernard McNamara, Jeremiah O'Reilly and the late David Courtney had previously paid to secure ownership of the property in 2007.

Preferred bidder

In the case of Donnybrook House meanwhile, it is understood that the Irish property investment and development group, MM Capital, has secured preferred bidder status with an offer of about €25 million.

Acquired by Colony Capital and U+I for about €10 million in 2014, the former AIB computer services centre has since been redeveloped into a five-storey office building extending to approximately 66,525sq ft. The property was offered to the market in April at a guide price of €27 million by agent Savills on behalf of the receiver, Kieran Wallace of KPMG.

The sale of the former City Arts Centre site at Dublin’s City Quay meanwhile remains at an earlier stage. Having been offered to the market at a guide price of €35 million, the property which has lain dormant for the past 18 years is understood to have attracted bids of up to €40 million.

Developer Simon Kelly's RQTwo, Johnny Ronan's Ronan Group Real Estate (RGRE), Pat Crean's Marlet Property Group, US real estate giant Hines, and a partnership involving Derek McGrath's Core Capital and David Kennan's KC Capital, are understood to be among the parties to have submitted offers for the last remaining waterfront site in the city's docklands.