M7 Real Estate snaps up €24 million Dublin 8 development

European property investor, M7 Real Estate, has bought a combined office and residential development in Dublin that Sean Mulryan's Markland Holdings put on the market for €24 million.

M7 confirmed that it has bought Fumbally Square, a complex of offices and apartments close to St Patrick's Cathedral, in what was the property group's first Irish deal.

The company did not reveal what it paid for the property, but Fumbally Square was put up for sale with a guide price of €24 million. It is understood that the new owner paid close to that figure.

M7owns and manages €2.7 billion in properties across 13 Europe countries, including the UK, Czech Republic, Denmark, Portugal, Poland and Slovakia. The company's senior managers, including chief executive, Richard Croft, own the business.

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US funds Goldman Sachs, Oaktree Capital and Starwood, which have been mopping up properties in the Republic over the past four years, are among M7's backers, providing capital for a number of its deals through partnerships.

Hong Kong real estate dynasty, the billionaire Kwok family, was also reported to have agreed to support M7's EREIP II fund, which the property investor used to buy Fumbally, although this was never confirmed.

John Murnaghan, M7's head of UK real estate, noted that the company was increasingly interested in the Republic. "We expect to add further Irish assets to our portfolio to complement this purchase," he said.

Fumbally Square is just off Clanbrassil Street and has 7,778 sq m of offices, 2,000 sq m available for further building, and four already let two-bedroom apartments. Planning permission for 16 more homes on the site lapsed a number of years ago.

The present line-up of tenants includes FCR Media, publisher of the Golden Pages, CMC Coal Marketing Company, Infineon Technologies and the Institutes of Technology Ireland.

When the property was put up for sale, tenants were paying €1.7 million a year in rent, although there was scope to increase this to €2 million by letting empty offices on the site.

Fumbally developer, Markland Holdings, was originally a joint venture between Mr Mulryan and businessman Patrick Kelly, who died in 2011. Mr Mulryan subsequently took over his late partner's estate.

Markland owed about €300 million to its lenders, the largest of which was State agency Nama, at the end of 2014. Between then and the beginning of last year, it sold properties in the Republic, Britain and Europe for roughly €100 million at the behest of its biggest creditor.