Ronan and Fortress in talks with Blackstone for €1bn sale of Dublin offices

US private equity giant weighs purchase of Facebook and Salesforce headquarters

Developer Johnny Ronan's Ronan Group Real Estate (RGRE) and US fund Fortress Investment Group are reported to be in talks with Blackstone in relation to the sale for €1.1 billion of the European headquarter offices they are developing for Facebook and Salesforce in Dublin.

While a deal for the offices at Fibonacci Square in Ballsbridge and Spencer Place in the city’s north docklands has yet to be concluded, an agreement on the matter would effectively short circuit earlier plans by RGRE and Fortress to bring the two properties to the open market along with Waterfront South Central, the major residential and commercial scheme RGRE is in the process of delivering on a 1.8-hectare (4.6-acre) site next to the 3Arena.

Cushman & Wakefield, Knight Frank and CBRE had been lined up to act as joint agents with Eastdil Secured for the projects, with expectations that the three schemes could command a figure in excess of €1.3 billion.

News of the potential deal, which was first reported by UK property website React News, comes just more than 14 months after The Irish Times reported on the agreement reached by RGRE and its then partners, Colony Capital, on the sale of a majority stake in the Facebook and Salesforce offices to South African investors.

That potential purchaser was selected following a targeted process directed by Eastdil Secured, in which it offered investors the opportunity to enter into a “joint venture opportunity” on the two Dublin schemes.

Had that deal proceeded, RGRE would have remained as a shareholder in the two properties following the sale. It remains unclear if the developer will retain an interest in either scheme should Blackstone secure ownership of them on this occasion.

Fibonacci Square, which is fully let to Facebook on a 25-year lease commencing in 2022, forms part of the social media giant’s wider European headquarter campus in Ballsbridge, Dublin 4, comprising 80,825sq m (870,000sq ft) of office space.

Blackstone already owns a substantial portion of the Dublin 4 scheme, having paid €395 million for 31,536sq m (339,456 sq ft) of office space across the four existing blocks to the rear of the site which had been owned by the Serpentine consortium, a syndicate of private individuals and companies assembled by AIB Private Banking and Goodbody Stockbrokers.

Global attention

The four blocks, which are fully let to Facebook and offer a weighted average unexpired lease term of over 15 years, attracted significant global attention, with more than €2.6 billion worth of capital vying for the asset.

In the case of global tech giant Salesforce's new European headquarters at Spencer Place in Dublin's north docklands, Blackstone stands to secure ownership of some 39,950sq m (430,000sq ft) of office space along with a 204-bedroom hotel leased to the Dalata Hotel Group Plc on a "35-year term-certain" lease.

It is understood that RGRE and Fortress intend to proceed with their original plan to bring Waterfront South Central scheme to the open market with CBRE acting as joint agents for the development with Eastdil Secured. Upon completion, the scheme is expected to comprise hundreds of apartments, 27,891sq m (300,126sq ft) of offices, along with numerous onsite amenities including cafes, creche facilities and restaurants.

Both RGRE and Fortress Investment Group declined to comment.

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Acting Property Editor of The Irish Times