Kennedy Wilson expected to buy Cork’s Elysian Tower

US property firm believed to be preferred bidder for apartment block

Elysian Tower in Cork city. Photograph: Daragh McSweeney/Provision

Elysian Tower in Cork city. Photograph: Daragh McSweeney/Provision

 

US property player Kennedy Wilson is in pole position to buy Ireland’s tallest building, the Elysian Tower apartment block in Cork, from its owner, private equity fund Blackstone.

Agents recently sought bids from potential buyers for the high-rise tower, which Blackstone acquired from builder Michael O’Flynn in 2014 in an agreement resolving a dispute between the pair.

Kennedy Wilson is understood to have emerged as the preferred bidder for the 17-storey property. Most of the tower’s 217 apartments have been let, although a number of them were sold after it was built a decade ago.

If Kennedy Wilson succeeds in buying the Elysian, it would mark its first significant move outside Dublin, where it owns about 1,000 apartments, making it one of the capital’s biggest landlords.

Blackstone chose Kennedy Wilson as the preferred bidder just days ago, meaning that it is the most likely buyer of the tower. Sources have indicated that the two sides have yet to finalise a deal.

No comment

None of the parties connected with the transaction would comment on Tuesday. The price that Kennedy Wilson bid is not known.

Kennedy Wilson owns Clancy Quay near Kilmainham, the Alliance on South Lotts Road and Sandford Lodge in Ranelagh among other apartment developments in Dublin.

The company is an active landlord, generally adding value to the properties it buys and charging premium rents. Its purchase of the Elysian is likely to mean that Mr O’Flynn’s company will no longer manage the block, as it has been doing under an agreement with Blackstone.

A three-bed apartment in the Elysian recently rented for €3,000 a-month. The tower has a mix of one-, two- and three-bed apartments as well as a number of penthouses.

The Elysian apartment block is the Republic’s tallest building, shading the second tallest, Cork County Hall, by a single storey.

O’Flynn Construction spent €100 million building the landmark tower, which the company finished in 2008, just as the Republic’s property and construction markets collapsed.

Refused

State assets agency Nama took over the company’s €1.8 billion bank debt. Mr O’Flynn told the Oireachtas banking inquiry in 2015 that Nama had refused to allow a fit out of the apartment block.

“Had that happened, it would have been occupied immediately,” he said. The company did fit out some apartments. Blackstone paid Mr O’Flynn’s business €5 million to complete a fit out in 2016.

Blackstone bought Mr O’Flynn’s debt from Nama for €1.1 billion in 2013. The pair subsequently clashed in the High Court over control of the business, but entered talks later that year.

In a settlement finalised in early 2014, Carbon Finance, a Blackstone subsidiary, was given the Elysian Tower and a number of other Irish and British properties that were earning rent, including some student accommodation blocks.

Mr O’Flynn kept development sites in the Republic and a commercial property in Edinburgh, Scotland, under the deal’s terms.

The O’Flynn Construction Group is now one of the more active housebuilders in the Republic, with sites in Dublin and Cork. In 2015, it announced plans to build 10,000 new homes over the succeeding seven to eight years.