Irish developer buys $33m Philadelphia business complex

Castleway Developments, an Irish property development group, has paid $33 million (€25 million) for the Philadelphia Airport Business Complex.

Castleway bought the 520,000sq m (1.7 million sq ft) industrial and office site from Pendel Development, which is controlled by a group of private investors in the US. The deal was funded from the company's own resources and debt finance from Anglo Irish Bank.

Castleway was formed in 2003 by Jim Osborne, a civil engineer by profession, and John McCann, the company's Monaghan-born chairman.

Accounts for the year to the end of 2005 show that the group posted an after-tax profit of €6.9 million compared with a loss of €1.9 million the previous year.

Castleway said it planned to add about a million square feet of additional office and industrial space to the 17 existing buildings by the end of 2009.

The complex is situated close to the end of a runway at Philadelphia airport and is beside two main motorways.

Mr Osborne, Castleway's managing director, said the expansion, along with a review of some existing tenant leases, would more than double the rent roll from the property and boost the value of the entire site to about $150 million.

Castleway announced yesterday that it had signed heads of agreement with two new tenants. Concord Steel and GSA (ATF) Lease, which represents government agencies, have signed 10-year leases worth a combined €3.2 million.

Market sources said the Irish company was also in advanced talks with US oil company Sunoco which is expected to take about 32,000sq m (105,000sq ft) of office space in a deal worth about €1.14 million a year.

The Irish company has renamed the complex the Orion Philadelphia Business Park. The Orion brand is also used on its business park in Blanchardstown. Tenants on the 150-acre west Dublin site, which is valued at €70 million, include Symantec and AGB Scientific.

Mr Osborne said the Philadelphia development was the first in a number of business-park developments that Castleway planned to undertake on the US east coast. "There is more value to be had in the US than in either the Irish or European property markets at the moment," he added.