Ronan gets €37m for office blocks

Property developer

Johnny Ronan

has moved a stage further in his quest to finally exit Nama by selling two more Dublin office blocks to repay his personal company debts.

The high-profile developer has sold the former MOP office building on Herbert Street, Dublin 2, to Irish Life for €25.5 million, and has agreed terms on the sale of his 66.6 per cent interest in a modern block overlooking the Grand Canal at Percy Place in Dublin 4, for a figure believed to be in the region of €11.5 million. He recently raised another €13.2 million by disposing of the Eugene F Collins legal offices on Burlington Road to investor/hotelier John Gallagher.

Ronan's personal property interests include about 25 commercial investments, which were largely acquired before he became heavily involved in Treasury Holdings. Around €400 million of his personal loans transferred to Nama are being gradually reduced at full price, as he cashes in on the heightened demand for city centre office buildings.

Ronan is also being backed by Development Securities, a British property investor listed on the London Stock Exchange, which has expressed interest in buying out his remaining debt at par.

One property expert contends that it is only a matter of time before Nama discharges developers like Ronan, who is gearing up to restart office construction at a time when overseas companies are finding it increasingly difficult to rent large modern buildings in the city.

The same expert blames the current Dublin housing shortage on the absence of a large number of builders who are banned from development sites while their business debts are being handled by Nama.

Number 30 Herbert Street, a six-storey building with a classical façade and a floor area of 4,645sq m (50,000sq ft), plus about 50 car parking spaces, was developed by Ronan in 1996 for tenants, Matheson Ormsby Prentice, who now trade as Matheson.

The fast-growing legal firm later relocated to Sir John Rogerson's Quay in the south docklands, renting the newly built Riverside 1V block first from developer Sean Dunne and later from its subsequent owner, Irish Life.

Dunne initially had to underwrite the rent on Herbert Street, and when he sold on the docklands scheme this responsibility passed on to the insurance company. The current rent roll of just over €2 million is due to run until 2016, but with city rents again moving up, Irish Life has obviously decided that now is good time to buy in the distinctive D2 block. The expectation is that it will let for something close to €430 per sq m (€40 per sq ft).

Prescient
Ronan's 66.6 per cent stake in the Percy Place building leaves Prescient Investment Managers with the balance of the equity. Prescient, formerly AIB Investment Managers, was recently acquired by Davy.

Ronan built the 3,377sq m (36,350sq ft) office block on the site of the former showrooms of British Leland group in the mid-1980s. Prescient is based in the block, paying about 45 per cent of the overall rent which is currently€945,140.

Agents Knight Frank acted for Ronan on the sale of Herbert Street and is also advising him on Percy Place. JLL represented Irish Life.