Irish developers are making their presence felt on London market
IRISH property developers are set to pour back into London as they look to reap profits in what has become the most expensive city in Europe.
Last week it emerged that low profile developer Thomas Ryan forked out some €100m for a site in Canary Wharf and unveiled plans to build the highest residential tower in Europe on the site.
That is the latest major deal involving Irish developers, and the rate of dealing is only expected to accelerate in the months ahead as investors focus even more of their resources on the UK capital.
Last month Sean Mulryan's Ballymore Properties launched its 1,700 apartment "London City" development which it expects to make more than €300m out of once it is complete.
The €850m project is aimed squarely at wealthy Asian investors and Mr Mulryan launched the development in Hong Kong with London mayor Boris Johnson.
Ballymore also sold off the 37 acre Royal Wharf site for an estimated €240m.
The proceeds of that deal will be used for the company's numerous other projects in London.
Those deals have sparked expectations that the Irish developers are moving back to the UK as they seek to capitalise on a property market which is showing no sign of slowing down, even as fears that the UK housing market in particular is overheating become greater.
One London-based property agent said on Friday he expected the number of Irish investors to increase sharply in the months ahead.
"We have been surprised by the level of interest from Ireland.
"There is quite clearly still a lot of money that can be put to work, and obviously London is the prime location for smart money at the moment," he added.
During the Celtic Tiger years Irish investors paid huge prices for assets across London, in some cases outbidding billionaires from the oil rich Gulf states.
Real Estate Opportunities (REO), which was majority owned by Treasury Holdings, bought the Battersea Power Station site for some £530m in 2006.
Treasury, which was controlled by Johnny Ronan and Richard Barrett, was behind a slew of the most well known developments in Ireland including the National Convention Centre, went into liquidation last year.
NAMA and Lloyds TSB eventually sold off the power station site for £400m last May.
Other developers, including the likes of Bernard McNamara also invested heavily in the city, buying up office blocks, hotels and retail units – many of which were eventually taken over by NAMA or lenders.
Thomas Ryan's 'Hertsmere Tower' – which will cost an estimated £1bn if it goes through – will be the tallest block on Canary Wharf, comfortably beating One Canada Square.
That building which already stands at the development, was the highest building in the UK until last year when it was overtaken by the The Shard.
Mr Ryan is understood to have been involved in small scale developments in Ireland but is thought to have done most of his business in the United States up to now.
This is his first major deal in the UK but is unlikely to be his last.
When the plans for the block were unveiled it was made clear that his company Ryan Corp was looking at doing other deals in London and is seen as highly likely to invest further.
Mr Ryan's firm Ryan Corporation UK paid close to £100m for the site, and development will cost upwards of £850m but if London property prices retain their value, the firm would easily recoup the cost of development.
London property prices have risen nearly 10 per cent in the last year, it emerged on Wednesday.
That rate however more than doubles in top-rated areas of the UK capital.
The proposed development will be billed as "prime" real estate that will go for as much as £1,000 per square foot.