Developer Johnny Ronan is set to complete a bank refinancing within weeks on €142 million of loans against 12 properties in receivership. The deal will also mean US-based Fortress Investment Group remains a junior lender against the portfolio, according to sources.
Bank of Ireland and AIB have committed to providing the businessman’s Ronan Group Real Estate (RGRE) with senior facilities to repay the existing loans against the assets, which were due to be repaid to UK-based M&G Investments at the end of January, the sources said. M&G appointed Grant Thornton as receivers over the properties in March, triggering a parallel sale process as RGRE sought to refinance the borrowings.
Sources said that Fortress, which has more than €100 million of subordinated loans out against the portfolio, has committed to staying on board for the two-year duration of the new bank facilities. Fortress inherited its exposure last year when it took over the property assets of US-based DigitalBridge, formerly known as Colony Capital, and a long-standing backer of RGRE projects.
The portfolio at the centre of the receivership is estimated to be worth about €300 million and includes the Connaught House office building on Burlington Road in Dublin 4, a stake in a nearby Percy Place property that is majority-owned by a Davy property fund, the Bewley’s Cafe building on Grafton Street and a mansion in Paris. Property agents Savills started marketing five of the assets last month with a guide price of €170 million on behalf of the receiver.
‘It’s about value for money. So, people feel that when they come in, they’re being charged reasonable prices’
RGRE has until September to repay M&G and stop the sale process, according to one source. Others have said the refinancing is on track to close within weeks.
Representatives for RGRE, Bank of Ireland, AIB, Grant Thornton and Fortress declined to comment.
The junior debt deal with Fortress comes as the US group and RGRE manage the disposals of a series of joint venture assets after both sides settled a legal dispute surrounding the management of disposals late last year.
What happens to the Northern Ireland protocol now?
Earlier this month, RGRE and Fortress secured in excess of €500 million from the sale to Blackstone of the European headquarter offices RGRE is developing for Salesforce in Dublin’s north docklands as well as a new hotel leased to Dalata Hotel Group.
The two groups are expected later this year to offer for sale the European headquarter offices RGRE is developing for Facebook at Fibonacci Square in Ballsbridge, Dublin 4. Two other joint assets — a north Dublin docklands apartments complex and the planned Waterfront office and residential scheme overlooking the river Liffey — will also be put on the market in time.
Meanwhile, it is understood that RGRE made a bid earlier this month for Citigroup’s European headquarters building in Dublin. The US bank put the building on the market in March at a guide price of €120 million as it seeks new office space for an expanding workforce.
RGRE has also pitched a large portion of the Waterfront office development at Citi. The bank, which has long had a 2,500-strong workforce in the Republic, said in April that it was creating 300 additional jobs.
The Sunday Times reported earlier this month that developer Shane Whelan’s Westridge Real Estate is also in the running for the Citi building. The report suggested that the €475 million mixed-use complex Westridge is building on the site of the former Dublin Institute of Technology campus at Kevin Street in Dublin 8 may provide a new home for Citi in the Republic.