Wednesday 17 October 2018

Here's Johnny! Ronan returns to the fray with a €300m war chest

It's been five years - but Johnny Ronan is back and thinking bigger than ever, write Niamh Horan and Nick Webb

Johnny Ronan
Johnny Ronan

Niamh Horan and Nick Webb

THE maverick property developer Johnny Ronan has amassed a €300m war chest to build and develop prime real estates sites in Dublin and London.

It is understood that he is being bankrolled by major US institutional funds as well as Asian sovereign funds and a number of high net-worth individuals.

As the developer plots his comeback, the Sunday Independent has learned he was a member of a consortium which made a £1bn bid to develop 'The Pinnacle' - one of the tallest skyscrapers in the city of London.

Mr Ronan had secured backing from Asian investors in an audacious plan to head up the landmark project.

Although AXA Real Estate Investment Managers ultimately pipped Ronan and his partners to the post, it showed the serious intent of the former Treasury Holdings boss to target prestige investment opportunities.

Last week Ronan became the most high profile developer to exit Nama, having paid back close to €400m over the last two years.

US private equity group Colony Capital and international bank M&G helped to refinance close to €300m worth of Nama debt.

Previously, Ronan had paid back close to €100m through property sales, offloading Chinese interests and selling the MOP headquarters to Irish Life, an office on Burlington Road to Bernie Gallagher and other assets.

Nama made between €90m to €100m profit on Ronan's loans, which they had acquired at a discount from the covered banks.

Meanwhile, as part of his plans, the Sunday Independent has learned that Ronan is looking at buying back or pursuing 'joint ventures' on some of his original Treasury sites from Nama, which will go to public tender.

Under law, developers in Nama are restricted from buying back their own sites. However, now that Mr Ronan is free and has paid up his debts in full, he is eligible to make a bid.

In an interview with the Sunday Independent this weekend, Guy Leech, who arranged the deal having worked with Ronan on Irish, UK and China projects, said: "Obviously we would like to get back involved in the Treasury sites.

"We have the finance to do it and we have the expertise in that we developed the likes of Spencer Dock so there is no doubt we are very strong candidates to maximise the return for the Irish taxpayer on the Treasury assets.

"Remember Nama already got €100m profit on the deal, which represents a success for Nama and the Irish taxpayer."

Mr Leech also described how Mr Ronan, through his company Ronan Group Real Estate (RGRE) has been meeting with sovereign wealth funds in Asia with the view to encourage them to invest in Ireland and the UK.

"They are very keen on London at this stage but he is trying to get them to see Dublin as a real investment opportunity. John's major successes have been in large scale developments so that is where he will concentrate most of his energy now."

Certainly Ronan's development pedigree bears scrutiny. He played major roles in the development of Google Headquarters, the National Convention Centre, Spencer Dock, the Ritz Carlton and Central Park in Sandyford. The award-winning residential tower Altro Vetro is also on his CV.

But it was their most grandiose project, Battersea Power Station in London, that proved to be the undoing of Treasury.

Ronan and partner Richard Barrett viewed Battersea as the company's master plan to avoid the crippling market crash in Ireland. When the Irish market was overheating Treasury decided to concentrate on Battersea.

Land was sold for €20m an acre in Sandyford and it purchased Battersea for €10m per acre. But the state bank moved on Treasury - and ultimately sold the London Power Station site for €600m. It is now expected to generate profits of up €10bn for Malaysian investors Sepia.

Asked how Mr Ronan feels about the fate of Battersea Power station, Mr Leech said: "To put it mildly, what Johnny would have to say about the Battersea debacle wouldn't be fit for print but he is a realist and wants to try and deal again with Nama."

Asked if there has been a gagging order placed on Mr Ronan as part of the deal, Mr Leech said: "No but, in saying that, he knows that Nama has the land. He wants to deal with them again."

A studio flat on the scheme recently sold for close to £1m and is about to go back on the market with a price tag of up to £1.5m. And it has not even been built yet.

The flat is one of 254 luxury apartments on the Battersea site that were launched off-plan in May at a lavish marquee party where prospective buyers were serenaded by Elton John. Prices for studios started from £800,000, while one-bed flats cost £1m or more and four-bed homes carried price tags of £4m or more. Construction has not yet started and they are due to be completed in late 2018.

"Battersea was the biggest site anyone has ever secured planning permission on in London. The trick is to go and find another one now. The Malaysians have already asked him to do it," said Mr Leech.

Ronan, who has just launched a new website and branding for his business, is opening a new office in London. He is currently recruiting a team of staff who will help him with his next venture - including a development manager to head up the group. He has been in talks in recent months with Raphael Vinoly, the Uruguayan architect behind the Battersea Power Station project.

Back in Ireland, Colony Capital is said to have backed Ronan in a €270m approach to buy Cherrywood. He also has a number of other sites on which he has secured funding to develop. These include a residential site on Appian Way, a building on Fitzwilliam Square which he will refurbish and covert to an embassy, a residential site in Delgany, Co Wicklow and a country house near his home in Enniskerry called St Valery's estate.

Sunday Independent

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