O'Flynn gets permission for £250m scheme

CORK-BASED property developer Michael O’Flynn has secured full planning permission for a £250 million (€320 million) mixed-use scheme in Edinburgh’s financial district and he is now hoping to secure backing to proceed with construction in 2012.

The £40 million purchase of the four-acre site by Tiger Developments was funded in 2006 by Irish Nationwide and this loan has been transferred to the National Asset Management Agency (Nama).

As such, any development of the project will require the approval of Nama.

Mr O’Flynn is believed to be in talks with a number of private equity groups about progressing the scheme and is also hoping to secure bank debt in the UK.

The Cork developer, whose projects have included the Elysian Tower apartment block in Cork, Ireland’s tallest building, believes the Haymarket scheme could yield a significant profit for Nama.

The site at Haymarket, which is near Edinburgh’s second busiest train station, will comprise 510,000sq ft of offices, 58,000 sq ft of retail and leisure, and 381 basement car parking spaces.

It also includes a 245-bedroom hotel, which has been pre-let to Travelodge. A car park operator has also been secured and other tenants are being pursued.

BNP Paribas Real Estate and Jones Lang la Salle are the letting agents.

Commenting on the development, Mr O’Flynn told The Irish Times: “Achieving consent for a scheme of this nature in Edinburgh is a real achievement and good news for all concerned.

“We have a number of parties who are keen to co-fund this development. Given the sustained tourism, retail and office demand, we are aiming to start on site in 2012.”

The Haymarket development has not been without its difficulties.

While it originally received approval from local planners, the Scottish government rejected the scheme in October 2009.

The original 17-storey design has since been reduced in scale and plans to include an InterContinental hotel have now been scrapped.

Mr O’Flynn has not revealed the identity of the private equity groups that have expressed an interest in backing the Edinburgh project.

But one is believed to be US firm Westbrook Partners, who agreed a joint-venture deal with Mr O’Flynn earlier this year on a £50 million, 435-bed student building near Wembley Stadium in London.

Mr O’Flynn’s company owns the site while one-third of the equity is coming from Westbrook to finance construction and to secure loans for the other two-thirds from UK lender Royal Bank of Scotland (RBS).

Anglo Irish Bank had provided the funds to purchase the property but that loan was refinanced with RBS to kickstart the project.

Tiger Developments is part of O’Flynn Construction, an unlimited company that does not file accounts.

Mr O’Flynn was one of the 10 biggest borrowers whose loans were the first to be moved into Nama.