US firm Quad­rant tar­gets €1bn slice of Ir­ish prop­erty lend­ing

Firm says prop­erty mar­ket fun­da­men­tally sound and econ­omy re­mains ‘deeply ro­bust’ More than €500 mil­lion lent to Ir­ish com­mer­cial prop­erty projects in three years

The Irish Times - Business - - BUSINESS NEWS - JOE BREN­NAN

US in­vest­ment firm Quad­rant Real Es­tate Ad­vi­sors has lent more than €500 mil­lion for Ir­ish com­mer­cial prop­erty projects since en­ter­ing the mar­ket three years ago to help fund the pur­chase of Clerys de­part­ment store in Dublin, and plans to orig­i­nate a sim­i­lar amount over the next two years.

Kurt Wright, chief ex­ec­u­tive of At­lanta-based Quad­rant, told The Ir­ish Times his firm, which to date has fo­cused on fi­nanc­ing land ac­qui­si­tion and spec­u­la­tive con­struc­tion of of­fice, ho­tel and mixed-use prop­er­ties in Dublin and Cork, sees con­tin­ued de­mand for Ir­ish of­fice space in the com­ing years, even as an ex­pected in­flux of jobs from Lon­don to Dublin has been less than many had pre­dicted.

“We have pulled back in lend­ing ac­tiv­ity in the UK in the of­fice sec­tor un­til Brexit has be­come more set­tled down, but on the other hand, we never ex­pected Brexit to give a big boost to Ire­land,” said Mr Wright. “You sim­ply aren’t over­sup­plied with of­fice in Dublin.”

Quad­rant, backed by Aus­tralian pen­sion fund money, en­tered Ire­land in 2015 to part fund the €29 mil­lion pur­chase of Clerys by Ir­ish in­vest­ment group D2 Pri­vate, led by Deirdre Fo­ley, and Cheyne Cap­i­tal Man­age­ment in the UK. The store was sub­se­quently closed, pend­ing re­de­vel­op­ment.

Clerys

The US firm sub­se­quently gave fi­nance to the new own­ers of Clerys to buy a port­fo­lio of prop­erty ad­ja­cent to the former de­part­ment store, which will fea­ture in a broader re­de­vel­op­ment of the area.

Over the past two years, Quad­rant has lent against projects such as the con­struc­tion of an of­fice block on Hanover Quay in the south Dublin dock­lands and 202-bed Star­wood Aloft Ho­tel be­ing de­vel­oped in the Lib­er­ties area of the cap­i­tal with the back­ing of busi­ness­man De­nis O’Brien.

Quad­rant is also providing fund­ing to an of­fice com­plex be­ing de­vel­oped by O’Cal­laghan Prop­er­ties in Cork city’s dock­lands, which re­cently se­cured Deutsche Bo­erse’s post-trade ser­vices unit, Clearstream, as a lead ten­ant.

“All the ex­pec­ta­tions we had in 2015 have been ex­ceeded,” said Mr Wright. “The prop­erty mar­ket is fun­da­men­tally sound and the econ­omy re­mains deeply ro­bust. The projects we are fi­nanc­ing are of the high­est cal­i­bre.”

Some €50 mil­lion of Quad­rant’s Ir­ish of­fice de­vel­op­ment fund­ing to date has orig­i­nated from the Ire­land Strate­gic In­vest­ment Fund.

In­ter­na­tional in­vestors

While the firm ini­tially flagged two years ago that it planned to set up a sep­a­rate Dublin-based fund to mainly tar­get Euro­pean in­sti­tu­tional in­vestors in­ter­ested in fi­nanc­ing Ir­ish com­mer­cial prop­erty deals, this is set to re­ceive ini­tial in­vest­ments in the com­ing months.

Mr Wright said that the dif­fer­ence be­tween the Celtic Tiger years and now is the level of long-term in­ter­na­tional cap­i­tal, such as Ger­man pen­sion funds, and listed real-es­tate in­vest­ment trust money that is cur­rently in Ir­ish com­mer­cial prop­erty.

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