Johnny Ronan to sell stake in D4 block

€8.5 million sought for developer’s 66.6 per cent interest in prestigious office block

8-34 Percy Place, Dublin 4: developed by Johnny Ronan in 1992 along with two adjoining apartment blocks

Leading developer Johnny Ronan is to sell his 66.6 per cent interest in a high quality office building overlooking the Grand Canal at 8-34 Percy Place, Dublin 4, as part of the restructuring of his personal property portfolio.

Declan O'Reilly of Knight Frank is guiding €8.5 million for the five-storey block which is certain to be of interest to wealthy private investors as well as Irish and overseas funds. Last October the country's largest developer, Treasury Holdings, controlled by Ronan and Richard Barrett, was declared insolvent with loans of €2.7 billion.

Ronan’s personal property interests, mainly assembled before he became heavily involved with Treasury Holdings, extend to at least 25 commercial investments which are believed to be worth between €250 and €300 million.

The best known of these is the Nama-occupied Treasury Building at Lower Grand Canal Street which he owns with Paddy McKillen and Prescient Investment Managers. The other assets include Connaught House, a prestigious office block on Burlington Road, Dublin 4, the 6,000sq m (64,583sq ft) Fortis Bank headquarters at Spencer Dock and the former MOPS building on Herbert Street.

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Ronan recently raised €13.2 million by selling the Eugene F Collins legal offices on Burlington Road to investor/hotelier John Gallagher.

Ronan’s latest decision to offload the Percy Place investment is understood to have been prompted by his long standing plan to redevelop a 30-year-old office block next to Connaught House as a major corporate headquarters. That building at 43-49 Mespil Road formed part of the Treasury Holdings portfolio and is currently for sale through Savills at a guide price of over €16 million.

Ronan has made known his desire to buy in the block because his ownership of Connaught House would allow him to maximise the development potential. Treasury secured planning permission to replace the block with a 8,361sq m (90,000sq ft) headquarters but when the property market crashed it was no longer possible to secure a pre-let and the permission ran out in August, 2010.

The Percy Place site was originally used as a showrooms and garage by the British Leland motor company. It was later acquired by financier Dermot Desmond who sold it to Ronan in the mid 1980s. He built the 3,377sq m (36,350sq ft) office block on the site in 1992 as well as two apartment blocks. The third generation office accommodation was much sought after from the start and was occupied for many years by AIB Investment Managers. The 33.4 per cent stake not owned by Ronan is held by Prescient Investment Managers which acquired AIB Investment Managers in 2011.

Rental income
Ronan's majority share is producing an income of €642,728 per annum and with one floor currently vacant the rent roll is expected to move in the short term to €806,000 when a suitable tenant is signed up. Once fully let, the investment will show a yield of 9 per cent as against 7 per cent at present.

Prescient is currently paying 45 per cent of the overall rent (€423,502), occupying 1,504sq m (16,196sq ft) on the first and second floors on a 10-year lease from December, 2012.

The company manages assets for a wide variety of clients including pension funds, corporates, charities and private clients both in Ireland and overseas. The fourth floor with 539sq m (5,802sq ft) is let to software developer Altion under a 22-year lease from 1999 at a rent of €294,746. Altion has sub-let the floor to O'Grady Solicitors.

The ground floor, with a total area of 617sq m (6,648sq ft), is let to estate agent Ganly Walters at €226,940 under a 25-year lease from last May. It has already sub-let part of the space to Leman Solicitors.

Internally the offices provide adaptable and flexible work space with a central core allowing for sub-division of the floor plates. The handsome entrance is finished with a polished stone floor and wall finishes.

There are 50 on-site car-parking spaces as well.

Jack Fagan

Jack Fagan

Jack Fagan is the former commercial-property editor of The Irish Times