Property developers Paddy McKillen and Johnny Ronan have teamed up to re-enter Dublin’s office construction market backed by a multibillion American investment fund and a British plc.
The two men and their investment backers closed the acquisition of a strategic site beside the former Burlington Hotel in Dublin 4 for €40.5 million yesterday.
Mr Ronan and Mr McKillen had originally planned to bid separately for the site with different backers.
They later decided to jointly submit a successful bid for the site that has planning for a high-spec office block.
The two developers have worked together in the past. They developed and jointly ownTreasury Buildings which houses the National Asset Management Agency (Nama) and the National Treasury Management Agency among other projects.
Colony Capital, a $20 billion investment fund, and Mr McKillen own about 60 per cent of the joint venture.
California-based Colony, which previously supported Mr McKillen in paying off his borrowings of hundreds of millions of euro from Anglo Irish Bank at par, is providing most of the finance. It is in a preferential position when a new office block is built and begins to generate revenue.
Mr Ronan and Development Securities, a British plc, are minority shareholders. Dev Sec is separately backing Mr Ronan in talks with Nama about exiting the agency by selling his assets or refinancing them.
Both developers will provide their expertise to the new project which is currently occupied by a 1980s office block which has been empty since it was sold in 2007 byAllianz Insurance to developer Bernard McNamara for €105 million.
Mr Ronan has previously developed the 100,000sq ft high-rise Monte Vetro building sold to Google, the 200,000sq ft Connaught House and nearby Bank of Irelandheadquarters on Burlington Road in Dublin 4.
Mr McKillen’s development focus has been overseas for many years until recently.
Mr McKillen has criticised Nama for its decision-making in relation to Treasury Holdings, the international development company co-founded by Mr Ronan. He has accused Nama of selling the Thames-side Battersea power station site in London owned by Treasury for a “steal,” and said it was “one of the most devastating decisions,” ever for Ireland. Source: The Irish Times.