Sunday 4 December 2016

DekaBank loan helped fund €242m One Spencer Dock deal

Published 01/09/2016 | 02:30

DekaBank provided funding to assist in AGC Equity Partners’ acquisition of One Spencer Dock
DekaBank provided funding to assist in AGC Equity Partners’ acquisition of One Spencer Dock
One Spencer Dock

DekaBank, whose asset management arm is currently in exclusive discussions with US private equity giant Blackstone to buy the former Burlington Hotel, has emerged as one of two main lenders to the fund that recently acquired One Spencer Dock for €242m.

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The German bank, which has some €240bn in customer assets, has jointly underwritten a five-year loan facility with ING Real Estate to support the deal, which saw AGC Equity Partners secure ownership of the docklands property on August 12.

ING acted as facility agent and account bank for the deal, providing €56m of the loan financing, while DekaBank is understood to have provided €88m.

The involvement of the German bank in supporting the transaction will be seen as further evidence of its confidence in the Irish economy and in the country's prime real estate assets as an investment.

The sale of One Spencer Dock marked the first significant investment by a major institution following the Brexit referendum.

Developed by Johnny Ronan and Richard Barrett's former company Treasury Holdings, the nine-storey building comprises approximately 226,624 sq ft of Grade A office accommodation over 100 basement level car parking spaces.

The property's office accommodation is occupied fully and serves as accounting and consulting giant PwC's Irish headquarters under three separate coterminous leases. PwC signed a 25-year lease from April 2007 to April 2032, giving an unexpired term certainty of 16 years - an attractive lease length in the current market. One Spencer Dock's total rent amounts to €11.78m per annum.

DekaBank's asset management arm is meanwhile expected to pay Blackstone approximately €180m for the former Burlington Hotel once a deal between the parties is concluded.

Blackstone stands to double its money on the Dublin 4 hotel, having spent €67m on purchasing the property in 2012 and a further €20m on its subsequent refurbishment.

DekaBank fended off rival bids for the former Burlington from the Abu Dhabi Investment Authority (ADIA) and the US-owned Hyatt Hotels and Host Hotels & Resorts.

While it is seeking to acquire the former Burlington Hotel property, the involvement of the Dalata Hotel Group in talks to acquire its leasehold is being viewed as an indicator that the famed Dublin 4 hotel's operations will be maintained.

Immediately prior to the crash and its later purchase by Blackstone, the hotel's previous owner, developer Bernard McNamara, had secured planning permission from Dublin City Council to deliver a €1bn mixed-use development on its site and adjacent former headquarters of Allianz Insurance. Mr McNamara paid a combined €393m for the two properties, with €288m of that being accounted for by his purchase of the Burlington Hotel and €105m by the Allianz property.

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