Dublin site that could provide 2,600 homes is bought by US group for over €120m

Lone Star completes purchase of almost 118 acres at Cherrywood

Cherrywood, Co Dublin. The sale of development land to Lone Star is part of the original partners’ strategy to recycle cash committed to the project as opportunities arise. File photograph: Cyril Byrne

Cherrywood, Co Dublin. The sale of development land to Lone Star is part of the original partners’ strategy to recycle cash committed to the project as opportunities arise. File photograph: Cyril Byrne

 

An affiliate of US private equity group Lone Star has completed the purchase of almost 118 acres of development land and parks in Cherrywood in south Dublin from investment firms Hines and King Street Capital, in a deal that is believed to be worth more than €120 million.

The land, in two plots, is expected to be capable of delivering 2,600 houses and apartments, Brian Moran, senior managing director for Hines in Ireland, said as he confirmed the sale to The Irish Times.

While Mr Moran declined to discuss the value of the transaction, which was completed earlier this week, property industry sources put a figure between €120 million and €140 million on it.

The land equates to almost 30 per cent of the 412-acre site that Hines and King Street bought in 2014 for €270 million, after the National Asset Management Agency and a group of banks appointed receivers to the most valuable plot in south Dublin. It is located at the interchange of the M50 motorway and N11 and belonged to builder Liam Carroll before his businesses collapsed in the property crash.

Broke ground

Ground was broken in early 2017 on the urban centre, that will eventually provide 8,000 new homes for 30,000 people.

Mr Moran said the partners have spent €50 million so far on infrastructure, including roads, sewage networks, parkland and sports facilities. They expect to spend the same amount again before the project is completed, though some of the costs will involve offsets between the developers and Dún Laoghaire Rathdown County Council.

“Infrastructure of this nature has turned out to be significantly more complex than we anticipated,” Mr Moran said, adding that this will have a “drag on expected returns” on investment.

Joint venture

Hines and Dutch pensions group APG Asset Management entered a joint venture early last year to develop a €1 billion, 2.1 million sq ft town centre, including 1,269 build-to-rent apartments, retail space and leisure facilities at the heart of the Cherrywood hub.

The sale of development land to Lone Star, handled by Savills Ireland, is part of the original partners’ strategy to recycle cash committed to the project as opportunities arise.

While Mr Moran said the partners might have made more money by selling the residential development plots to a number of developers, limiting it to Lone Star and Cairn should make it easier for council planners to manage and speed up the delivery of homes.

Flotation

It is understood that Lone Star plans to roll much of the land into a company it is lining up for flotation, called DRes, which is led by Durkan Residential’s managing director, Patrick Durkan. However, it is believed that an envisaged build-to-rent component will be developed separately.

The Irish Times first reported in March that Lone Star was in advanced talks to buy the residential development site.