US investment firms Hines and King Street Capital, who acquired a 412-acre site in Cherrywood in south Dublin four years ago for €240 million, are preparing to sell off large residential plots from the portfolio that would be capable of delivering 2,600 homes.
Sources said the joint venture partners have hired Savills in Ireland to market 73 acres of development land on the site to homebuilders who would construct the planned houses and apartments.
Hines recently completed, in partnership with Dún Laoghaire-Rathdown County Council, the construction of the first phase of the project, including three new parks, sports facilities and 5.4km of roadways and paths.
The real-estate firm also entered a joint venture with Dutch investor APG Asset Management earlier this year to develop the second phase: a €1 billion, 2.1 million square foot town centre, including 1,269 build-to-rent apartments and 585,000sq ft of retail and office space, as well as leisure facilities.
Work on this element of the project is scheduled to commence next month and is expected to generate about 3,000 construction jobs.
Strategic development zone
Hines and King Street Capital secured 60 per cent of available building land in an area designated a strategic development zone a decade ago in the 2014 transaction. They recouped some of their investment in January by selling eight office blocks at Cherrywood Business Park on the site to San Francisco-based Spear Street Capital for €145 million.
The current plan to sell on residential development lands follows on from the partners’ disposal of two lots in Cherrywood in early 2016 to publicly-quoted Cairn Homes, which also has an option to buy a third site for €9.2 million. It plans to build 300 homes there.
“Hines and its partners are fully committed to Cherrywood and on the delivery of the residential, commercial and retail town centre aspects of the project,” a spokesman for the firm said. “We continue to have very important interest here.”
He declined to comment further. A spokesman for Savills also declined to comment.
Cherrywood, the largest and most valuable site in south Dublin, located at the interchange of the M50 motorway and N11 and served by the Luas, belonged to builder Liam Carroll before his businesses collapsed in the property crash. The National Asset Management Agency and a group of banks appointed receivers Stephen Tennant and Paul McCann of Grant Thornton to it in 2014.
The entire project is expected to cost €2 billion to deliver and ultimately become home to about 30,000 people.
Goodbody Stockbrokers forecasts that some 18,000 new homes will be completed in Ireland this year, about half the estimated level of demand. It sees construction rising to 25,000 units by 2020.