The highly anticipated sale on behalf of receivers Grant Thornton of 11 Dublin investment properties owned by developer Johnny Ronan’s Ronan Group Real Estate (RGRE) has been formally launched. The portfolio, which includes the landmark Grafton Street premises of Bewley’s Cafe and the high-profile office building Connaught House on Burlington Road in Dublin 4, is being offered to the market by joint agents JLL and Cushman & Wakefield at an overall guide price of €150 million.
The proposed sale is taking place after RGRE consented last November to AIB and Bank of Ireland’s appointment of receivers with a view to recovering €130 million in loans secured against the assets. The country’s two pillar banks acquired the loans for their part from M&G Investments in 2022 at a time when the overall portfolio carried a value of some €300 million. The refinancing, which came at the proverbial eleventh hour, called a halt to the UK-based lender’s own engagement of Grant Thornton to recover its money through the disposal of numerous of the same assets now being put up for sale. M&G became involved with RGRE in 2015, when it refinanced its Nama loans, clearing the way for the developer to exit the State’s so-called bad bank.
The 11 properties in the subject portfolio are being sold by way of private treaty with interested parties invited to bid on individual or multiple lots. Apart from its inclusion of office and retail assets, the portfolio features two residential properties and three properties that are co-owned with the part interests in these being offered to the market.
The portfolio comprises:
- Connaught House Located on Burlington Road in Dublin 4, Connaught House comprises a five-storey over-basement grade A office block of 117,000sq ft. The building is let to a strong tenant line-up that includes Macquarie Aviation and Alkermes and is producing rent of €7 million per annum. The weighted average unexpired lease term (WAULT) to expiry is 4.46 years. While individual guide prices have not been set for the various assets, The Irish Times understands that Connaught House is expected to command about €80 million, or 53 per cent of the €150 million being sought for the overall portfolio. Although the €80 million figure is significant, it represents a 36 per cent fall in the €125 million valuation Savills is understood to have ascribed to the property in 2022 when it was readying it for sale on behalf of M&G.
- 78-79 Grafton Street One of the most prominent buildings on the street, this property is best known as the flagship premises of Bewleys Café which is over-holding on an expired 35-year lease and paying a rent of €1.46 million per annum. The 17,000sq ft building is being marketed on the basis that it will provide investors with asset-management potential.
- Kingram House, Fitzwilliam Place This four-storey office block is fully let to the Irish Medical Council with approximately 8.71 years remaining on the lease which has upward-only rent reviews. With a rent of €827,500 per annum and a B2 Ber rating, the 15,850sq ft property is expected by market sources to secure in the region of €10.75 million, which would provide a new owner with a net initial yield of 7 per cent.
- 6/7 Harcourt Terrace Fully let to BKD architects on a full repairing and insuring (FRI) lease with an expiry in December 2024, this property is producing a short-term rent of €357,648 per annum. As such, it is being viewed as an opportunity for owner-occupiers, developers and investors.
- 70 Grafton Street Located on the corner of Harry Street, this property is fully let to PTSB and City Break Apartments with a weighted average unexpired lease term (WAULT) of 14.5 years to expiry offering a prime investment opportunity with a rent of €647,343 per annum. The property is expected by market sources to command a price of about €11.2 million, which would see a buyer securing a net initial yield of 5.25 per cent.
- 116 Grafton Street This ground and basement retail investment is fully let to the global cosmetics retailer, Lush, on an effective full repairing and insuring lease until September 2025. The property is generating a rent of €285,000 per annum and has strong asset-management potential.
- Apartment B, 116 Grafton street Available for sale separately to the retail unit, this two-bedroom apartment is generating annual rent of €29,952.
- Apartment No 7, Lafayette Building Located at the corner of Westmoreland Street and D’Olier Street, this three-bed penthouse apartment is let on a residential tenancy agreement currently producing €42,104 per annum.
The co-owned properties are:
- Percy Exchange, Ballsbridge offers 24.09 per cent ownership (by long lease) of this multi-let office investment overlooking the Grand Canal. It is fully let to tenants including Ogier Leman, Clark Hill, Bridge Consulting and Axway.
- Kilmore House, Spencer Dock offers a 60 per cent interest (by long lease) in a multi-let nine-storey office building with a strong tenant profile including PwC, Universal Investment and Optum.
- St James Place, Adelaide Road offers a 50 per cent interest (by long lease) in this multi-let office opportunity producing a passing rent of €840,721 per annum (100 per cent). A feasibility study is in place for the development of a 10-storey grade A office of over 5,760sq m (61,031 sq ft) (Subject to planning).
Commenting on the sale, John Moran of JLL and Aidan Gavin of Cushman & Wakefield said: “The diverse mix of these investments provides a significant depth of quality properties to an asset-starved market and we expect will attract a high level of interest particularly from investors seeking both secure income returns and asset management prospects.”
