The Ronan Empire: The Buyers For RGRE’s 11-Strong Portfolio
He’s the comeback kid of Dublin’s real estate market who improbably roared back after the boom turned to bust and has pushed to make Dublin a high-rise city.
Johnny Ronan is now trying to wrest back control of some of the 11 properties put up for sale after Ronan Group Real Estate agreed in November to Allied Irish Banks and Bank of Ireland’s appointment of receiver Grant Thornton, with a view to recovering €130M in loans secured against the assets.
Since the sale began earlier this year, there have been competing rumours over the fate of the properties, as all the while RGRE has continued to push forward with several other ambitious projects. Bisnow took a deep dive into what the Ronan empire looks like today.
The 11 properties that are up for sale were offered to the market by joint agents JLL and Cushman & Wakefield at an overall guide price of €150M earlier this year. Lenders AIB and Bank of Ireland acquired the loans from M&G Investments in 2022 when the portfolio held an estimated value of around €300M.
Some of the assets have been held by Ronan for decades. M&G became involved with RGRE in 2015 when the UK investor refinanced RGRE's loans that had been taken over by the National Asset Management Agency, paving the way for the developer to exit the state’s bad bank. The properties are now being sold by way of private treaty, with interested parties invited to bid on individual or multiple lots.
They sit in a group of special-purpose vehicles financially insulated from the rest of the group, and RGRE's ongoing development schemes, including housing on the huge Dublin Glass Bottle site, are not affected.
RGRE told Bisnow that several of the press reports about the portfolio are inaccurate and that it is early days in the process, but it declined to comment further.
When Grant Thornton was appointed, RGRE said, “The move acknowledges that the loans on the properties in question need to be restructured as a response to current market conditions and RGRE Holdings is working closely with its banks and the receiver to reach a mutually agreed resolution of the position.
“There are no cross-guarantees or cross-collateralisation, and the company’s interests in its other developments and other sites are unaffected by this decision.”
The Ronan Portfolio Put Up For Sale
At the biggest asset in the portfolio, Fine Grain Property has agreed to buy the 117K SF Connaught House for a price understood to be in the mid-€60M range after MM Capital failed to advance to exclusivity on a deal. Located on Burlington Road in Dublin 4 and completed in 2005, occupiers include Macquarie Aviation, Groupon and Alkermes. It produces rent of circa €7M a year, with a weighted average unexpired lease term of 4.5 years. The deal represents less than half the €125M valuation ascribed to the property in 2022.
The portfolio also includes fully owned properties:
78-79 Grafton Street. One of the most prominent buildings on the street, it is best known as the flagship premises of Bewley's Café since 1927, paying a rent of nearly €1.5M a year. Refurbished in 2017, the 17K SF building is being linked with a private buyer, while RGRE was also understood to be bidding to reclaim the property. Last year, RGRE won a court battle with the tenant over the €1M ownership of four Harry Clarke stained-glass windows that are part of the property.
Kingram House, Fitzwilliam Place. This four-storey office block is fully let to the Irish Medical Council with approximately 8.7 years remaining on an upward-only lease with a rent of €827,500 per annum and a B2 building energy rating. A French investor is understood to be acquiring the nearly 16K SF property for around €11M, which would provide a net initial yield of nearly 7%.
6-7 Harcourt Terrace. Fully let to architect BKD on a lease with an expiry in December, this property is producing a short-term rent of €357,600 a year and was marketed as providing an opportunity for owner-occupiers, developers and investors. The guide price is €3.8M, reflecting a net initial yield of 8.5%, and the building is in exclusivity with a private buyer.
70 Grafton Street. Located on the corner of Harry Street, this property is fully let to Permanent TSB and City Break Apartments with a WAULT of 14.5 years at a rent of €647,300 a year. The property is expected to attract about €11.2M, with a net initial yield of 5.25%.
116 Grafton Street. Retailer Lush lets this ground and basement retail property on an effective full repairing and insuring lease until September 2025. The property is generating a rent of €285K per annum. A sale has been agreed to, with the guide price €2.9M or above. The sale of a two-bedroom apartment at the same address has also been agreed on separately through Lisney, guiding at €1.8M.
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, and a deal has been completed after guiding at €900K.
The co-owned properties are:
St James Place, Adelaide Road. RGRE has a 50% interest by long lease in this multilet office in Dublin 2, which produces a total passing rent of €840,700 a year. A feasibility study is in place for the development of a 10-storey, Grade A office of more than 61K SF. It is guiding at offers over €4M.
Percy Exchange, Ballsbridge. Guiding at €4.3M, this offers 24% ownership by long lease of a multilet office investment of five storeys over a basement, fully let to tenants including Ogier Leman, Clark Hill, Bridge Consulting and Axway.
Kilmore House, Spencer Dock. Davy Real Estate stepped in to acquire RGRE’s 60% interest by long lease in this multilet, nine-storey, Grade A office building with tenants including PwC, Universal Investment and Optum. The guide price exceeded €22M.
The Future For Ronan
In the meantime, RGRE is also seeking permission for 550 new homes and two office buildings on the last undeveloped riverside site in Dublin’s docklands. RGRE has lodged a planning application for its Waterfront South Central project on North Wall Quay, and the 1.5M SF development will include three residential blocks rising to eight, 12 and 25 storeys, plus 373K SF of offices.
If it gets the go-ahead, the proposed development will be the third-largest mixed-use project in Dublin after the Glass Bottle scheme, which RGRE is developing in partnership with Lioncor Developments and Oaktree Capital Management, and the Spencer Dock development on North Wall Quay.
In August, moves to bring fresh investment into the consortium developing the Glass Bottle site were reported, with Oaktree Capital Management understood to be seeking an equity partner to help develop the project. Oaktree, along with Dublin-based Alanis Capital, partnered with RGRE after they bought a majority stake in the site from NAMA in 2020 in a deal understood to have valued the plot at €200M. They then acquired the remaining minority interest last year. Oaktree is the main equity investor, while Blackstone is providing debt financing.
Construction is progressing on just fewer than 900 units in the Phase 1 and Phase 1B elements of the overall development, with topping out of the first phase completed in July. These phases are fully funded and on course for completion over the next two years, including the first homes by next summer.
Also in the potential pipeline for RGRE is the AquaVetro building, a 178K SF, 22-storey office complex on Tara Street in Dublin 2.
