Developers gear up for new 'Battle of Ballsbridge'
Johnny Ronan seals deal for AIB site as the major players swoop in to snap up Celtic Tiger trophies
Published 26/07/2015 | 02:30
The cranes are soaring above Dublin's skyline again, signalling the return of Ireland's biggest property developers.
And, as is the nature of the beast, it's all about location, location, location.
Big-name players - Johnny Ronan, the Comer brothers, Luke and Brian, and Joe O'Reilly - are swooping in on multi-million euro sites in the leafy suburb of Ballsbridge and marking out their territory on some of the most coveted developments in Ireland.
First up is Johnny Ronan. It's only just over three months since the colourful developer exited Nama on April 1, but already his name is on some of the major plays in town.
He has officially signed along the dotted line for one of the most prized sites in the heart of Ballsbridge. The AIB site, a 3.7-acre plot of land situated across from the RDS, was once owned by Sean Dunne and sold for €200m before the property market crash. Mr Ronan is said to have carved himself out a deal which sees him take over the spot for one-third of that, handing over €67.5m at 1pm last Friday afternoon.
The Sunday Independent has learned the vacant site - comprising four buildings - will give way to a new scheme of 300,000 sq ft of prime office space under Ronan's command. The project will finish in 2018 and it is expected to create employment for 4,000 people. A source close to the project said: "It will bring a lot of foreign investment and it's expected another Facebook, Google or Twitter multinational-type company will take up residence there.
"Remember, Ronan was involved in developing the sites for Google so he knows exactly what it takes to attract that kind of big-name company to take up office. It's no Battersea Power Station, but it's a good start on the road from perdition."
Guy Leech, the financial executive who arranged Ronan's Nama settlement, told the Sunday Independent: "We are delighted with the acquisition. There's a huge shortage of prime office space for foreign direct investment by the likes of the Googles of this world. It is undoubtedly one of the finest sites in the city."
Only last weekend this paper revealed that the former Treasury boss will develop the tallest building in Dublin after teaming up with the Wilbur Ross-backed Cardinal Capital to build a €130m skyscraper at Tara Street train station.
But the AIB site, also backed by Wilbur-Ross, made headlines this weekend as one of the best locations in the city. So what's the attraction of the southside neighbourhood for Ronan's team?
A source close to the project explains: "You can't get better than Ballsbridge for developing office space. It is low-rise and low-density, it is a nice working environment and it's so accessible because the greater area is where the vast amount of executives live. If you think about it, which would you prefer if you were living in Blackrock or Dalkey - to drive to the RDS or down through those tailbacks on Pearse Street in the mornings to the city centre or the IFSC? It's the best location for office and residential space for a reason."
Next up are the Comer brothers - Luke and Brian were among the few who were able to ride out the recession largely unscathed and emerge with their €3.1bn property empire intact. They set tongues wagging when they rolled into Dublin in 2013 to buy the UCD veterinary college site on two acres in Ballsbridge for €22.5m. With planning for retail, commercial and 87 apartments in three blocks,
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the shell was constructed in 10 months but the work then stopped abruptly.
A source explained the reason behind this: "They had to race to get it 'substantially built'. This would mean that they wouldn't lose the pre-existing planning permission that had been granted to the original owner Ray Grehan. But once the frame was built they met the requirements to hold on to the planning permission and can now afford to sit back and watch prices rise and take their time with the building."
Speaking after signing the deal, Luke gave their approach to investment in land. "It's all about timing and pricing. If you buy low at the right time, no matter how thick or stupid you are, you will make money."
The Comers were never in Nama in the first place but it is interesting to note that some of the names getting back into property speculation are still in the State's bad bank.
In May 2014, Nama's chairman Frank Daly promised "the sight of cranes returning" to Dublin's skyline, but no one could have predicted it would be down to debtors still on their books.
Joe O'Reilly made headlines last week when he went up before the Banking Inquiry. He told the inquiry he had personal and corporate loans totalling approximately €2bn from the guaranteed banks in September 2008, and that he believed all of this money would be repaid.
But it doesn't seem he has to wait to see that through before making big moves on property again.
O'Reilly was recently dubbed the 'Sheikh of Ballsbridge' after he teamed up with a Middle East investment group to buy another of Sean Dunne's former landmarks - the former Jurys and Berkeley Court hotels in Dublin. His new nickname is a play on the glory of the Celtic Tiger days when Dunne earned the moniker the 'Baron of Ballsbridge' after waging war in the 'Battle for Ballsbridge' in which he forked out hundreds of millions of euro for properties in the area.
Former foreman O'Reilly snapped up the former Jurys and Berkeley Court hotels for close to €170m - less than half the €380m price tag Dunne shelled out a decade ago.
Meanwhile, on the other side of Ballsbridge, Irish- American John Malone has bought the five-star Four Seasons Hotel.
Malone plans to spend €5m on the landmark hotel beside the RDS. The 73-year-old developer is showing no signs of slowing down after recently buying up a bundle of prime Irish sites including the Westin Hotel and Castlemartin. Worth €7.7bn, he is the biggest landowner in the US.
Another Ballsbridge asset that it is speculated will come up for sale soon is Blackstone's Hume House. It is expected to draw attention from some of Ireland's biggest names if it's up for the taking.