Tuesday 24 April 2018

Starwood seeks clearance for €200m buy

The Starwood-owned W Hotel in New York’s Times Square
The Starwood-owned W Hotel in New York’s Times Square
Starwood Hotels and Resorts 5-year share price
John Mulligan

John Mulligan

US investment group Starwood has formally notified the competition watchdog of its intention to buy the huge €200m Elm Park office and residential development in south Dublin.

Starwood had been named preferred bidder last month for the scheme, which was put up for sale by Nama in September.

A Luxembourg-based vehicle owned by Starwood - SOF 10 Elm Park Investments - has now informed the Competition and Consumer Protection Commission (CCPC) that it will be buying the large development.

Assuming there are no competition issues raised, the deal could be cleared within weeks.

The Elm Park campus extends over 17.3 acres, with a total commercial and residential floor area of 575,000 sq ft.

It's currently producing a rent roll of €9.5m a year from two office blocks that are fully let, as well as two apartment buildings.

The commercial tenants are insurance firm Allianz and drug company Novartis.

Elm Park was developed in 2007 by high profile builders Bernard McNamara, Jerry O'Reilly and David Courtney for about €550m. There are 218 apartments included in the sale. The offices have sufficient capacity for 3,500 workers.

An existing building to the front of the large site, which had been earmarked for a 168-bedroom hotel, will probably be converted to office use. It's been speculated that it could generate about €6m in annual rent as an office.

Mr O'Reilly's Chartered Land, which had teamed up with US-based Ares Investment Fund, was the runner-up in the bidding process. The campus had been expected to fetch about €185m.

The lender to the original project was Anglo Irish Bank, and Mr McNamara himself had at one stage owned a large number of apartments at the complex.

A receiver was appointed to Elm Park in 2010.

It was revealed in October that Nama agreed to help bankroll extensive remedial works at Elm Park in order to "tackle shortcomings in the in infrastructure of the development".

"While Nama will not disclose the cost of the investment it approved for this work to be undertaken by the receiver, the agency can confirm that as a result of this work the entire development is now fully compliant with all relevant regulations and has been certified as such by the relevant authorities," the state agency said at the time. The bill is estimated to have run to millions of euros.

The latest publicly available receiver's report for Radora Developments, the company that was behind the Elm Park project, show that the company incurred €2.9m in property costs and expenses in the six-month period between November 2013 and May 2014.

In the previous six months period, it incurred €2.2m in property costs and expenses.

Irish Independent

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