Hines secures €145m from sale of Cherrywood offices
US real estate giant Hines has secured in the region of €145m from the off-market sale of the eight office blocks at Cherrywood Business Park in south Dublin to San Francisco-headquartered Spear Street Capital, the Irish Independent can reveal.
It is understood the proceeds of the deal, which was managed by Eastdil Secured, a subsidiary of the Wells Fargo Bank, are being used by Hines to offset the cost of developing the town centre element of the wider Cherrywood scheme.
All told, the US developer is set to plough some €2bn into the creation of Dublin's newest suburb, which upon completion will be home to 30,000 people and a working population of up to 10,000.
News of Hines' sale of the offices at Cherrywood comes just a week after it announced its entry into a joint venture with Dutch pension investor APG Asset Management (APG) to develop and hold the 1,221 Build-to-Rent (BTR) apartments it is developing at Cherrywood town centre.
Subject to planning permission, construction of Cherrywood Town Centre is to get underway in the coming months, with the first apartment blocks expected to be completed by the middle of 2020.
The total development cost of the apartments along with street level shops and cafes is estimated at approximately €450m.
While the overall cost of delivering Cherrywood is significant, Hines' sale of offices at Cherrywood Business Park for €145m has allowed it to claw back over half of the €270m it paid in partnership with another American fund, King Street Capital, for Cherrywood's 412 acres in 2014.
In acquiring the 'Project Cherry' portfolio, Hines and its partners secured the largest and most-valuable development site in south county Dublin. They also managed to fend off bids from three other consortia that made it through to the final round of the sales process, which was conducted by Stephen Tennant and Paul McCann of Grant Thornton, who were acting as receivers on behalf of Nama, Danske Bank, Bank of Scotland (Ireland) and AIB.
All three of the final-round underbidders for Project Cherry saw Irish involvement.
Johnny Ronan, former Treasury Holdings chief and founder of Ronan Group Real Estate (RGRE), bid for the portfolio with the backing of the US-headquartered Colony Capital and the UK property group, Development Securities (since renamed U+I following its merger with Cathedral Group).
Developer Michael Cotter, whose Park Developments has had a major presence in the south Dublin market for decades, joined forces with Delancey and Brehon. The third and final underbidder was Ardstone Capital and Davy Hickey Properties, which is best known for its development of the Citywest Business Campus.