Ronan back in business with office site
Developer agrees to buy site beside Burlington Hotel for €40.5m
The large office block which has planning approval from Dublin City Council on the site of the former Allianz Insurance headquarters
Property developer Johnny Ronan is gearing up to re-enter Dublin’s office construction market after agreeing to buy a key site beside the former Burlington Hotel along with a UK partner for €40.5 million.
The site has full planning permission for a high density office block with a net floor area of 15,384sq m (166,668sq ft).
Ronan’s acquisition of the best available city-centre site comes as he moves ahead with plans to finally exit Nama by selling a number of office blocks and other commercial investments to repay his personal company debts.
Virtually all of his 25 personal properties were assembled before he became involved in the now defunct Treasury Holdings.
Around €400 million of his personal loans transferred to Nama are being reduced at full price following the sale of his investments.
His UK partner, Development Securities (DevSec), has also undertaken to buy out his remaining debts at par, leaving him free to move back into construction which he dominated for more than two decades.
Ronan was responsible for the vast majority of the large- scale office projects in Dublin in recent years including the 700,000sq ft Central Park; the 100,000sq ft high rise Monte Vetro sold to Google; the 200,000sq ft Connaught House and Bank of Ireland HQ on Burlington Road and the 400,000sq ft PwC and Fortis blocks at Spencer Dock along with the adjoining National Convention Centre.
Leading office agencies have warned that Grade A office rents are set to rise sharply because of the shortage of available space and the fact that most of the long-established office developers are no longer active in the market. There has been no new office construction in the city for six years and the only two office blocks currently being developed in Dublin – at Canada House on St Stephen’s Green and the Veterinary College in Ballsbridge – are being built by telecoms billionaire Denis O’Brien and the Galway-born Comer brothers.
Ronan’s re-entry into the office construction sector will be welcomed by State agencies chasing overseas investment and employment for Dublin.
The €40.5 million to be paid by Ronan and DevSec for the Burlington site is considerably higher than the €25 million sought for it by Wesley Rothwell of CBRE. The agency yesterday refused to comment on the sale.
The site is currently occupied by a 1980s office block which has been vacant since it was sold in 2007 by Allianz Insurance to developer Bernard McNamara for €105 million.
It is widely recognised that the receiver to the McNamara company, Paul McCann of Grant Thornton, and advisers CBRE did exceptionally well in persuading the planners to allow the current 7,021sq m (75,573sq ft) block to be replaced by one more than double that size.
The new owners will have the option of building a prestigious standalone headquarters building or two distinct and separate blocks designed by leading architects Henry J Lyons.
The expectation is that they will opt for a single block with 95 basement car parking spaces which is likely to cost between €40m and €45 million and take 18 months to develop.