US funds to buy Cherrywood site for €270m

South Dublin site set to become centre of development

Two American funds, Hines and King Street Capital, are due to complete contracts within days to acquire the largest and most valuable development site in south Dublin.

The partnership has emerged as the top bidder at over €270 million for the 400-acre Cherrywood Business Park and adjoining lands which are set to become the main focal point for new commercial and residential developments over the next decade with an estimated end value of over €2.5 billion.

Hines, one of the largest real estate organisations in the world with assets of almost $26 billion, joined forces with King Street Capital, a giant American hedge fund, to outbid four other consortia – three of them with Irish interests – in the final round of offers for Project Cherry. The successful bid is understood to have been only marginally ahead of the runner-up.

The massive site was offered for sale on behalf of Stephen Tennant and Paul McCann of Grant Thornton who were appointed receivers by Nama, Danske Bank, Bank of Scotland (Ireland) and AIB. Savills advertised the property for sale on the international market last July at a guide price of € 220 million.

Liffey Valley

Hines will be known in Dublin primarily through its involvement with HSBC in purchasing Aviva's 72.8 per cent interest in Liffey Valley shopping centre in west Dublin for around €250 million.

The company has also been chosen by Nama as asset manager for Spencer Dock in the north Dublin docklands following the collapse of Treasury Holdings. Three of the five overseas bidders for Cherrywood had entered into partnerships with Dublin-based development companies before pitching for the business park and the vast adjoining lands.

Johnny Ronan, founder of Treasury Holdings, who recently confirmed his comeback with the purchase of the €40.5 million site beside the Burlington Hotel with a UK partner, joined forces with Colony Capital and Development Securities.

Ardstone Capital, the European real estate investment company founded by Donal Mulcahy and Donal O'Neill, enlisted the support of Davy Hickey Properties who developed Dublin's most successful business park, Citywest.

The fourth consortium comprised Delancey, Brehon and Michael Cotter’s\Park Development who has been one of the major players in the Dublin property market over the past two decades.

Cherrywood is set to become the main centre of development as the property market emerges from a six-year crisis. A newly adopted Strategic Development Plan for the area will open the way for fast track planning for a range of developments including a new town centre which will be located on a site of over 26 acres.

The master plan also includes scope to build 3,836 residential units along with 484,474 sq m (5,214781 sq ft) of commercial buildings.

Jack Fagan

Jack Fagan

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