Johnny Ronan closing in on €150m refinance deal in Dublin docklands

Agreement on Spencer Place apartment scheme debt will see Fortress receive significant payment while remaining on board for portfolio’s sale

Developer Johnny Ronan’s Ronan Group Real Estate (RGRE) is at the advanced stages of discussions with US investment group Ares Management to refinance €150 million in debt associated with Spencer Place, the high-end residential scheme it is delivering in Dublin’s north docklands.

Although the proposed deal, which is expected to complete over the coming weeks, will see RGRE’s partner Fortress receive a significant payment arising from the exposure it inherited when it took over the property assets of the developer’s former backer, Colony Capital, last year, the sale of the 403-unit apartment portfolio is not expected to proceed for at least another 18 months. The Irish Times understands that RGRE and Fortress have agreed that the Spencer Place scheme, which is nearing completion, should be let and occupied first, before being offered to the market.

The apartments’ location immediately adjacent to the new European headquarter campus RGRE is in the process of completing for Salesforce at Spencer Dock is expected to see strong demand for, and high rents being paid for them. Some 3.500 workers are expected to be based at the US tech giant’s new docklands office once it opens for business. Only last month RGRE and Fortress secured more than €500 million from the sale to Blackstone of the 38,369sq m (413,000sq ft) property along with the adjacent 204-bedroom hotel, which is let to Dalata Hotel Group.

And while the planned sale of the apartments at Spencer Place would appear at this point to be some way off, RGRE and Fortress may yet see unsolicited offers for the portfolio given the combined strength of its location and demand for it. Indeed, even as Ronan’s company engaged over the past two years in a protracted and unsuccessful battle with Dublin City Council in relation to the development’s proposed height and scale, the scheme was the subject of two potential forward sales.

In the first instance, US real estate investor Cortland is understood to have been prepared to pay some €315 million in early 2020 to fund and acquire the larger scheme of 550 apartments and co-living units RGRE had been proposing for the site. The proposed deal with Cortland was abandoned, however, following repeated legal challenges from Dublin City Council in relation to An Bord Pleanála’s approval of RGRE’s plan to accommodate the additional units by increasing the height of the two blocks within the development from seven to 11 and 13 storeys respectively.

And as recently as last July, the UK-headquartered property investor Round Hill Capital had engaged in discussions with RGRE in relation to the potential purchase for about €220 million of a scaled-down development comprising 349 apartments and a 100-bed aparthotel.

The scheme, which is now nearing completion, will comprise a total of 403 residential units distributed across two blocks of seven and eight storeys respectively. While the majority of these apartments will be aimed towards the upper end of the private rented sector market, the development will also include a number of units for social and affordable housing.

Apart from its accommodation, Spencer Place will also feature a 24-hour concierge, gym, cinema, top-floor communal areas, 78 car spaces, plus a car-sharing club, and 828 bicycle parking spaces.

The news of RGRE’s proposed refinance deal with Ares Management, a global investment group with more than $325 billion (€317 billion) in assets under management, comes as the developer nears completion of another refinancing with Bank of Ireland and AIB of a prime property portfolio valued at €300 million. The deal, which was first reported on by The Irish Times in May, relates to RGRE’s interest in 12 properties including Bewley’s flagship premises on Grafton Street and Connaught House on Burlington Road.

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Acting Property Editor of The Irish Times