Private Irish investors closing in on knockdown €20m deal for Dublin 4 office block

A group of private Irish investors is closing in on the purchase of Shelbourne House in Ballsbridge. The consortium, which it is understood is being advised by the owner and CEO of Core Capital, Derek McGrath, is set to pay about €20 million for the Dublin 4 building. Should a deal proceed at that level, it would represent a 50 per cent discount on the €40 million paid by Mel Sutcliffe’s Quanta Capital to secure ownership of the property from receivers acting on behalf of US private equity giant Cerberus in 2019.

Shelbourne House is being sold on this occasion by receivers appointed by alternative lender Relm Finance over 27 properties owned by a sub-fund of Goldstein Property ICAV, an investment vehicle managed by Quanta Capital. Relm is backed by funding from US investment group Avenue Capital.

Shelbourne House had historically formed part of the portfolio of O’Malley Homes and Development and had, for years, served as the location for its headquarters.

Cerberus is understood to have acquired the debt securing the property when it purchased Nama’s €3 billion Project Gem portfolio. While the O’Malley Group of companies continues to trade successfully, a number of its loans were included in the Nama sale.

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Located on a 0.7-acre site on Shelbourne Road between the Comer Group’s Number One Ballsbridge office scheme and the high-end Lansdowne Place apartment development, Shelbourne House currently comprises a seven-storey office and apartment building extending to a total area of 7,068sq m (76,079sq ft).

Although the majority of the offices are let to tenants, including the Malaysian embassy, An Post and the OPW, the property’s potential for redevelopment was pointed to in the planning application submitted in 2018 by its then receiver Stephen Tennant of Grant Thornton. In it, he sought permission to demolish the building and replace it with a 10,567sq m (113,742sq ft) structure.

That particular plan was rejected by both Dublin City Council and An Bord Pleanála on the grounds that the proposed amount of office space wouldn’t be in keeping with the site’s residential zoning objective.