Sunday 21 October 2018

Wilbur Ross backs Johnny Ronan in €130m skyscraper deal

Cardinal Capital all set to bankroll what will be Dublin's tallest building

Developer Johnny Ronan
Developer Johnny Ronan
Nick Webb

Nick Webb

Former Treasury boss Johnny Ronan has teamed up with the Wilbur Ross-backed Cardinal Capital to develop Dublin's tallest building at Tara Street train station.

The €130m office tower will be 22 stories tall, which will make it larger than Google's Montevetro building - also built by Ronan.

US billionaire Ross made a fortune when backing a turnaround at Bank of Ireland. He was part of a group including Prem Watsa's Fairfax Financial that bought a 35pc stake in Bank of Ireland for 1.1bn in 2011. Ross made €477m when selling his stake in the bank last year, trebling the value of his initial investment.

He re-invested part of his profits in a new €400m joint venture with Cardinal Capital, which was set up to provide financing for commercial and residential development projects. Domestic banks have shied away from financing major development projects.

Last March, CIE (which owns the key site) hired Lisney to find a partner to help it develop an office scheme behind Tara Street train station. The State transport company had indicated that it was prepared to either grant a 300-year ground lease or take 10pc of the annual rental income from the proposed building.

Ronan is understood to have beaten off a number of other groups to ink the deal for the €130m project. He was unavailable for comment. The Tara Street deal is the first major transaction involving the Cardinal/Wilbur Ross joint venture, although it is said to be working on a number of other deals.

Ronan has worked closely with CIE before, developing the National Convention centre by Spencer Dock and the Google Montevetro building with the semi-state.

Ronan recently exited Nama and is thought to have been the only major developer to have repaid all of his personal loans at par, leading to no losses for the tax payer.

Last week, a group including Ronan, Paddy McKillen, Colony Capital and Development Securities, inked a major deal - thought to be worth up to €150m - with German asset manager Union Investment to finance the development of a massive office block on Dublin's Burlington Road.

The consortium had bought the site for around €45m to build a "Google-sized" office development in the heart of Dublin 4.

The lack of development of new offices in Dublin since the financial crisis started in 2007 has led to drastic shortages of prime office space, which has pushed rents up to record heights. The lack of available office space is hindering FDI as multinationals are unable to find suitable premises.

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