Mar­let move closer to own­ing his­toric block

De­vel­oper has just two sites to buy to as­sem­ble en­tire city cen­tre block Only Hawkins House and The Bro­ker­age left fol­low­ing €56m pur­chase from Nama

The Irish Times - Business - - FRONT PAGE - AI­DAN MUR­PHY

As news emerges of the Mar­let Prop­erty Group’s re­ported €56 mil­lion pur­chase from Nama of the for­mer Apollo House site on Tara Street, the de­vel­oper is one step closer to as­sem­bling a unique 1-hectare (2.45-acre) city block at the heart of Dublin’s his­toric core.

Bounded by Townsend, Tara, Pool­beg and Hawkins streets, the block is one of the most im­por­tant re­de­vel­op­ment sites in the city, es­pe­cially given the unusu­ally high build­ing heights for new devel­op­ment that are per­mis­si­ble un­der the Ge­orges Quay lo­cal area plan. Mar­let’s lat­est deal gives it con­trol of some 0.58 hectares (1.43 acres) of the block, with just two sites now fall­ing out­side of its con­trol.

Mar­let com­menced its site as­sem­bly in late 2015 with the off-mar­ket ac­qui­si­tion of Col­lege House, an of­fice block for­merly oc­cu­pied by An Post and owned by the Bren­nan fam­ily of bread-mak­ing fame. Just a few months later it ac­quired the ad­join­ing Screen Cin­ema from the Dublin Cin­ema Group, con­trolled by the Ward fam­ily.

The ex­act pur­chase prices are un­known, but when Mar­let’s pur­chase of the Apollo House site is in­cluded, it is be­lieved that the com­pany has ex­pended more than €100 mil­lion to date.

Plans to re­de­velop the city block have been mooted since 2007, af­ter Gar­rett Kelle­her’s Shel­bourne De­vel­op­ments ac­quired Apollo House from solic­i­tor Damien Tansey, and sub­se­quently ac­quired an ad­join­ing petrol sta­tion and the Long Stone pub.

In Septem­ber 2007 the Of­fice of Pub­lic Works (OPW) agreed terms with Kelle­her for a joint ven­ture, which, had the deal pro­ceeded, would have seen the com­bined sites of Hawkins House and Apollo House re­de­vel­oped by Kelle­her as of­fices, with the State to re­ceive a share of the rental in­come pro­duced by the new block.

The plans never pro­ceeded due to the prop­erty mar­ket’s col­lapse, but Kelle­her’s ac­qui­si­tion of a num­ber of prop­er­ties con­sol­i­dated own­er­ship of the city block, mak­ing a fu­ture as­sem­bly much eas­ier.

De­mol­ished

Mar­let cur­rently has plan­ning per­mis­sion to con­struct two new of­fice blocks in­cor­po­rat­ing ground-floor re­tail units and a large en­ter­tain­ment venue. Apollo House was de­mol­ished in re­cent months by the site’s ven­dor.

Mar­let ap­pears to be pro­gress­ing with the de­mo­li­tion of the Screen Cin­ema and Col­lege House, but it is un­likely to com­mence con­struc­tion un­til it is cer­tain it can as­sem­ble the two re­main­ing sites (Hawkins House and The Bro­ker­age), which would ne­ces­si­tate a re­design of the per­mit­ted scheme.

The Depart­ment of Health va­cated Hawkins House over the sum­mer and, hav­ing ob­tained plan­ning per­mis­sion in July 2017 to re­de­velop the site, the OPW is in the early stages of or­gan­is­ing the de­mo­li­tion of the ex­ist­ing of­fice block. While the OPW was ap­par­ently sat­is­fied to dis­pose of the site a decade ago, judg­ing by its deal with Kelle­her, and an ear­lier at­tempt to sell the site for €60 mil­lion-plus in 2006, its cur­rent in­ten­tions re­main a mystery.

The OPW has dis­played an in­cli­na­tion to­wards rent­ing, rather than build­ing of­fice space of late, such as the let­ting of Miesian Plaza on Bag­got Street to re­house the Depart­ment of Health, and another ru­moured po­ten­tial let­ting for the Rev­enue Com­mis­sion­ers at the Dublin Land­ings devel­op­ment.

De­spite this, the OPW might be in­clined to re­de­velop Hawkins House for the State’s use if it an­tic­i­pates an ob­vi­ous re­quire­ment for of­fice space.

De­ci­sion time

But it will have to make a de­ci­sion in the near fu­ture if it in­tends to sell, as the site is un­likely to ever be as valu­able to Mar­let as it is cur­rently.

Based on the price per hectare paid by Mar­let for Apollo House, Hawkins House’s larger site could be worth up to €68 mil­lion. By ac­quir­ing it, the de­vel­oper can ap­ply for a new plan­ning per­mis­sion for the en­tire block and avail of ef­fi­cien­cies of scale, giv­ing it the ca­pac­ity to pay the OPW a bumper price.

Aside from Hawkins House, it is un­der­stood that Mar­let has of­fered to buy out the Bro­ker­age apart­ments on Townsend Street, of which there are 24 one- and two-bed­room apart­ments and two com­mer­cial units.

Ac­cord­ing to com­pany doc­u­ments, the de­vel­oper pur­chased one apart­ment last year for more than €500,000 – well in ex­cess of mar­ket value – and it also ac­quired a ground-floor com­mer­cial unit for an undis­closed sum.

Mar­let is un­likely to com­plete a pur­chase of any more units in the block un­til all own­ers have unan­i­mously agreed to sell.

A fourth of the block’s apart­ments traded hands be­tween 2011 and 2013 for prices rang­ing from €120,000 to €200,000, while long­stand­ing own­ers who ac­quired the units from de­vel­oper McIn­er­ney in 1998 paid prices start­ing from €140,000, with the ben­e­fit of Sec­tion 23 tax re­liefs. It is be­lieved that many own­ers have agreed terms for the sale of their units, but agree­ment is not yet unan­i­mous.

Past at­tempts

Sim­i­lar past at­tempts by other de­vel­op­ers to buy out en­tire apart­ment schemes, where units are all in sep­a­rate pri­vate own­er­ship, for re­de­vel­op­ment have all failed.

How­ever in this case, own­ers are likely con­scious that Mar­let’s of­fer is a once-off op­por­tu­nity as The Bro­ker­age oc­cu­pies a rel­a­tively mod­est site of about 0.06 hectares (0.15 acres) and the high prices of­fered are based on the po­ten­tial mar­riage value that would be un­locked by com­bin­ing the apart­ments’ site with Mar­let’s ad­join­ing sites.

It will be a ma­jor coup if Mar­let, led by Pat Crean, and its fi­nan­cial back­ers, Lon­don­based M&G In­vest­ments, suc­ceed in ac­quir­ing the re­main­ing two sites. The re­sult­ing re­de­vel­op­ment will give a fresh lease of life to a city block that has long been ne­glected. Watch this space.

IN­SET PHO­TO­GRAPH: BRYAN O’BRIEN

A CGI of Mar­let’s pro­posed re­de­vel­op­ment of the Screen Cin­ema and Col­lege House sites. In­set: the site of the for­mer Apollo House.

Jack Fa­gan Edi­tor

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