Shortly before Christmas, builders broke ground on a development that will ultimately be home to about 30,000 people. It marked the first real steps in a €2 billion investment that will turn a long dormant site at Cherrywood in south Co Dublin into a substantial and largely self-contained suburb.
It is probably one of the few sites left in Dublin with potential for a development on such a scale. Cherrywood already has a business park and is served by the Luas and the capital’s road network.
Its 412 acres sit in an area where demand for housing is at its highest. The most surprising thing about it is that it has been lying idle for so long.
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Much of this is down to history. In early 2000s, the land was the focus of a two-year corporate battle between solicitor and developer Noel Smyth and builder Liam Carroll, who were joined by other well-known figures, such as Dermot Desmond and Paschal Taggart.
Once that had played itself out, the planning process and then the financial crisis intervened, leaving Cherrywood with nothing but an industrial estate and Luas stop.
Its new owners, US multinational Hines and private equity fund King Street Capital, bought it out of receivership in 2014 for €270 million.
Dún Laoghaire-Rathdown County Council adopted a strategic development plan for the area that involves a purpose-built town centre, housing and commercial buildings.
According to Hines Ireland managing director, Brian Moran, the work now being done will pave the way for this.
As a first step, building contractor and civil engineers John Cradock /Jons Civil Engineering will put in three parks, roads and utilities such as gas, water and and electricity cables.
A town centre, focused on the Luas stop, with shops, offices, homes and a library will follow.
“It will be a typical European town centre focused on the Luas stop, that will very much be the core,” Moran says.
He draws an analogy with established Dublin neighbourhoods such as Ranelagh and Rathmines, which house large populations close to an identifiable centre and adds that, in common with them, those living in Cherrywood should not need to get into their cars to drive to the shopping area.
The US company will apply to Dú
n Laoghaire-Rathdown council for permission to build the centre in late March or early April.
Moran says people will see it begin to take shape early next year.
From there, Hines and other developers will begin work on the surrounding residential area.
The US company’s share of this will run to about 4,000 homes accommodating about 15,000 people.
It could finish that work in three years. Other companies will build the rest of the housing.
Selling sites
One of these will be listed builder Cairn Homes, which last year bought two lots at Cherrywood from Hines for €21.5 million and took an option to buy a third for €9.2 million. It plans to build 300 homes there.
The US company will recoup part of its investment through deals of this nature, selling on parcels of the property to other players who will then take charge of their own developments.
As it stands, it owns more than 60 per cent of the available building land there.
Hines has around $93 billion (€87bn) in assets and is working on 105 different developments around the world.
It works to much the same formula with all of them, putting in the services and centre that residents will need first and then building most of the homes. Moran highlights two other projects, Puerto Nuevo in Barcelona, Spain, and Bayside in Toronto, Canada, which resemble its Dublin project.
Cherrywood’s status as a strategic development zone is meant to speed up planning.
Once proposals fit in with its overall terms, the council should give them the go-ahead.
So far, Moran observes that this has been working well. “Since it got its designation they [Dún Laoghaire-Rathdown] have staffed up and resourced up, so that has made a big difference,” he says.
Senior planners from the Government’s Housing Delivery Office are also keeping a close eye on proceedings.
“They have been very proactive in making sure that we cannot sit back and the council cannot sit back,” Moran says.
Cherrywood’s history goes back to the late 1980s, when Phil Monahan’s Monarch Properties bought 280 acres of what is now the site for £10 million.
Dunloe Ewart, the Dublin-listed property firm led by Smyth, took over Monarch in 1998 and brought in British Land as its partner.
Long battle
Smyth says that it then increased the site to its current 412 acres. “At one stage there was a valuation on the land of about €1.2 billion,” he recalls.
Dunloe and other developers with property in south Dublin, including Treasury and Park Developments, put up €15 million towards the €90 million cost of extending the Luas line out to Cherrywood, something that Smyth argues helped unlock the site's potential.
At around that time, Carroll entered the fray. His Zoe Developments had been one of Dublin's biggest apartment builders over the previous decade.
His “build them and sell them” approach earned him millions and he was beginning to look at other opportunities.
He began buying shares in Dunloe and by autumn 2000 had built a stake of more than 25 per cent, replacing Smyth as its biggest shareholder.
He ultimately increased that holding to 27 per cent.
This allowed him to block a move by Smyth to buy out the other shareholders and take Dunloe private.
In fact, as his holding allowed him to shoot down any initiative requiring a special resolution, which must have 75 per cent support, it put him in a very powerful position.
A long battle for control of the company and its assets ensued, much of it fought out in public. It took a number of strange turns.
At one point in 2002, Carroll lost his voting rights because it emerged that he had failed to declare his interest in a tranche of Dunloe shares bought by one of his companies. The High Court ultimately restored the rights to him.
Carroll suggested in about May 2002 that he and Smyth bid for each other’s stake.
Had that happened, Stock Exchange rules would have required the winner to offer to buy out the other shareholders, which by then included financier Dermot Desmond and businessman and subsequent Irish Greyhound Board supremo, Paschal Taggart.
Smyth demurred, but proposed that Carroll sell his shares to the company in exchange for its interest in Cherrywood.
When that was turned down, Smyth then proposed in late 2002 that the company buy British Land’s interest in the site for €63.4 million.
However, shareholders including Carroll, Taggart and Monahan voted this down.
After the October general meeting at which this proposal was defeated, Cyril Metliss, the British Land director responsible for the company's Irish business, remarked that the vote was quite silly. "There's not logic to it, it's all personality," he said at the time.
Smyth then offered to buy the company for €167 million, which was rejected. He subsequently sold his stake to Taggart, for a €30 million profit.
In November 2002, the remaining big shareholders accepted Carroll’s offer of €197 million for Dunloe, allowing him to take it private and giving him effective control of its assets.
British Land then exited, leaving him with full ownership of Cherrywood.
Smyth believes that this had always been his aim.
"He always wanted to get his hands on it," he says. Much of the coverage focused on Dunloe's site on Sir John Rogerson's Quay, which faced the IFSC and bordered Dublin 4, and missed the potential of the land outside the city.
SDZ
However, the battle for control had stalled plans for a shopping centre, offices and new homes at Cherrywood.
Even while property values in the Republic soared, there was no further movement on what should have been a prize asset.
While it was zoned for commercial use, Dún Laoghaire-Rathdown began considering a strategic development zone proposal for the area that was more focused on homes.
While this was going on, the boom began running out of steam in 2007 and by 2008 the property jig was up. Carroll’s empire crumbled in 2009, owing €1.2 billion to its banks.
He had borrowed heavily to fund a whole range of ventures, including the purchase of Dunloe.
He had also bought shares in a number of quoted companies, including ferry operator Irish Continental Group, which at one point looked like it could become the focus of a takeover battle similar to that at Dunloe Ewart.
Despite two bids to have his companies placed in examinership, they ended up in multiple receiverships.
State agency Nama took over his AIB liabilities that were tied to Cherrywood in 2010.
Along with some of Carroll's other lenders, Danske Bank and Lloyds, it appointed Stephen Tennant and Paul McCann of Grant Thornton as receivers in July 2014.
They sold it to Hines and King Street Capital for €270 million several months later.
Moran says that its new owners know all about Cherrywood’s colourful history.
They were particularly careful with due diligence and went through everything line by line.
“We would have been aware of what happened,” he says, “but, with something like this, the past is the past.”
Facts and figures: Cherrywood to cost €2 billion and house 30,000
When it is ultimately finished over the next decade, Cherrywood will be home to around 30,000 people.
It will have 8,000 homes, made up of suburban houses, and 1,300 one-, two- and three-bed apartments.
A town centre that will include shops, offices, a cinema, a library and other services.
A Luas stop, bus stops, 5.4 km of roads and links to Dublin’s road network.
A park at Tully, next to the town centre, which at 22 acres will be the size of St Stephen’s Green in central Dublin.
Two other parks, one of 13 acres at the northwestern end and Ticknick, the biggest of the three, whose 47 acres will include playing fields and a pavillion.
The total cost will be €2 billion. The first stage, building roads and putting in utilities such as elelectricity, gas and water, will cost €160 million.
When it is ultimately finished over the next decade, Cherrywood will be home to around 30,000 people.
It will have 8,000 homes, made up of suburban houses, and 1,300 one-, two- and three-bed apartments.
A town centre that will include shops, offices, a cinema, a library and other services.
A Luas stop, bus stops, 5.4 km of roads and links to Dublin’s road network.
A park at Tully, next to the town centre, which at 22 acres will be the size of St Stephen’s Green in central Dublin.
Two other parks, one of 13 acres at the northwestern end and Ticknick, the biggest of the three, whose 47 acres will include playing fields and a pavillion.
The total cost will be €2 billion. The first stage, building roads and putting in utilities such as elelectricity, gas and water, will cost €160 million.
