Hines in pole position for Project Cherry after knockout first round bid

Hines are in pole position to win the Cherrywood Business Park and development scheme ahead this Thursday’s final bid, after a knockout €235m first round bid, CoStar News understands.

King Street Capital, the US hedge fund headed by Irish-American Brian Higgins, which is now looking to sell the 153,558 sq ft Bishops Square office block on Kevin Street in Dublin acquired in July 2013 for €65m, partnered with Hines on the Project Cherry bid.

The 400-acre site, south of Dublin, was placed into receivership by creditors NAMA, Danske Bank and Lloyds Banking Group in July, who appointed Stephen Tennant and Paul McCann of Grant Thornton.

Once the loans were accelerated, and the loans were collapsed, Tennant and McCann instructed Savills as sales agent and a guide price of €220m was issued as the Project Cherry portfolio was brought to market in July.

CoStar News understands that five first round bids were submitted.

The first consortium is comprised Starwood Capital, PIMCO and Oaktree Capital Management, who together offered €210m.   

Ardstone Capital, the boutique European real estate investment manager founded by Donal Mulcahy and Donal O’Neill, and local developer Brendan Hickey, of Davy Hickey Properties, also, together, offered €210m.

Johnny Ronan, founder of Treasury Holdings who confirmed his comeback with the €40.5m purchase of a 1.7-acre development site in Dublin’s Burlington Road, has once again teamed up with Colony Capital and Development Securities and offered €215m.

The fourth consortium comprised Delancey, Brehon Capital and Park Developments, who together pitched their first round bid at €220m.

Brehon Capital previously successfully tied up with PIMCO in their €152.5m joint venture acquisition of the 25-strong Ulysses direct property portfolio, with a €100m five-year acquisition finance facility from Morgan Stanley.

Park Developments, founded by Michael Cotter, was behind The Park Carrickmines commercial development in Dublin.

Hines and King Street Capital’s knock out €235m first round bid, therefore, is €15m above the second highest bidder, and as a result looks to be the front runner at this stage.

The 400-acre site is expected to become a focal point for development in Dublin over the next 10 years following the recent adoption of the Cherrywood Strategic Development Zone (SDZ).

The SDZ, which provides a ‘fast track’ planning process for development, stipulates that the land must be utilised for the construction of a town centre, surrounded by substantial residential, office and retail space.

It is estimated that the gross development value (GDV) as of today in relation to the undeveloped land is in excess of approximately €2.5bn, according to Savills.

In addition to the potential for residential development, the Cherrywood SDZ also allows for up to 484,474 sq.m of non-residential development.

This includes approximately 37,800 sq.m of retail space within the town centre zoning lands being offered for sale, and approximately 220,000 sq.m. of office space primarily located within the surrounding area of the well-established Cherrywood Business Park.

Construction of Cherrywood Business Park began in 2000.  It currently comprises approx. 52,312 sq m of tenanted offices, retail and leisure buildings, with substantial basement and surface car parking. 

Current tenants include Dell Direct, Rational FT Services, Friends First, Elavon Financial Services and Covidien Services Europe Limited.

Final binding bids are due on Thursday.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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