Development Securities plc, the British listed fund backing Johnny Ronan, plans to invest up £20 million (about €25 million) in equity into Irish property deals, according to an investor presentation.
"Ireland presents considerable investment and development opportunities for us – a market in which we see strengthening demand and opportunities to apply our strategy of creating value through regeneration," it told investors in April.
“Maximum equity exposure in this market is to be restricted to circa £20m,” it added. Property funds usually use a combination of debt and equity allowing them to invest a multiple of the underlying equity.
Dev Sec confirmed it was part of a consortium – including developers Paddy McKillen and Johnny Ronan, as well as Colony Capital, a €20 billion American investment fund – that has bought a development site on Burlington Road, in Dublin 4, for €40.5 million.
The site has planning permission for the development of a 15,400sq m (166,000 sq ft) grade A office building expected to require €50 million to develop. The UK company said it expected in the near-term to market the five-storey building for prelets, before beginning construction within six months with an anticipated completion date of mid- to late 2016.
Michael Marx, chief executive of Dev Sec, said: "The acquisition at Burlington Road presents a rare opportunity to acquire a 'shovel ready' development site in Dublin, a market in which the supply of new, high-quality office space is limited, and where only one major speculative development scheme is currently under construction."
He said demand for offices was "strengthening" and his company hoped to build an office building of "similar quality to 10 Hammersmith Grove, our prime office development in London. We have an established track record in office development and this expertise is further strengthened through investing in the partnership with Mr McKillen and Mr Ronan, two of Ireland's most experienced commercial developers."
Mr Marx said the support of Colony Capital, which previously backed Mr McKillen in paying off his debts of hundreds of millions to the former Anglo Irish Bank, further "underlines the strength of both the team and the project.
"This is our second acquisition in Dublin, a market where we see continued investment and development opportunities." Dev Sec's executive director Matthew Weiner is among its team working on projects in Ireland.
Dev Sec's first Irish acquisition was of a quarter-acre site on Percy Place, off Haddington Road, Dublin 4, for €2 million from the National Asset Management Agency last year. It teamed up on this project with Mr Killen. Construction on this site has begun on a mixed-use development of 12 apartments, a restaurant, shops and offices.
The British plc is also helping developer Johnny Ronan as he plans to refinance his personal and company borrowings to Nama of over €300 million. Mr Ronan’s plan involves a combination of sales and refinancings.
In February Dev Sec teamed up the William Pears Group to buy a portfolio of British properties with a face-value of £100 million from Nama. The portfolio was previously owed by Gerry Gannon, a former co-owner of the K Club.
