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Inside Ronan And Fortress' €1.3B Dublin Sale


For global real estate investors looking for prime assets it is a rare opportunity. A trio of Dublin's hottest commercial properties has hit the market with a combined value of over €1.3B.

With Dublin increasingly considered a global city that presents good investment returns, and blue-chip companies such as Facebook and Salesforce as long-term tenants, the sale has caught the eye of the biggest buyers in international real estate.

As Ronan Group Real Estate and Fortress Investment Group place the top-tier commercial properties on the market, who could be interested in snapping them up? Bisnow analysed which investors may be tempted to put in a bid.

Savills Head of Cross Border Investment Rasheed Hassan said Dublin presents a strong opportunity compared to other similar cities. 

"In a global context or European context, Dublin is getting a lot of attention as a euro-denominated jurisdiction, so there's no hedging issues for European investors," he said. "And yet the yields are that little bit higher than in Germany or France.  It is seen as a top tier city and it has still got pretty cheap financing costs.

"So, I think for cash-on-cash investors, in particular European cash-on-cash investors I think it's certainly in the spotlight as one of the most interesting places to invest at the moment from an income perspective."

What are the three properties put on sale?

Fibonacci Square: Named after the Italian mathematician, Fibonacci Square scheme is situated at Merrion Road on part of the former AIB Bankcentre in Dublin 4. 

In 2018 Facebook signed a 25-year pre-let on the entire 350K SF office block being developed by RGRE as part of its new campus. The deal was the largest single office letting in Irish history at the time. The overall campus when completed is set to become the second-largest Facebook campus globally, behind only its California HQ.

Spencer PlaceThe 419K SF Spencer Place at the North Wall Quay in Dublin 1 represents another giant letting for RGRE.

Designed by architects Henry J Lyons and nearing completion, the scheme was proposed as a multi-tenanted asset. Colony Capital came on board as development funder on the project and Salesforce took an interest, signing up to lease the entire scheme in 2019. The building is close to practical completion with internal fit-out.

Waterfront South CentralAcquired in 2018 for an estimated €180M, the Waterfront scheme came with planning for 420 apartments and up to 300K SF of office space.

According to RGRE the scheme now boasts 1,005 resi units, 400K SF of office space and is in development. Of the three schemes Waterfront is the least progressed, having seen RGRE enter into a dispute with Dublin City Council over the height of parts of the scheme. 

In May 2021 An Bord Pleanála refused planning for a tower up to 45 storeys high in the Waterfront scheme.

I heard there was a court battle. What’s the story so far? 

For RGRE and Fortress, the trio of Dublin properties was an accidental relationship. RGRE never expected to be partnering with the U.S. investment group, as the schemes formed part of a wider portfolio, so they became uneasy partners.

RGRE had initially tried to stop co-investor DigitalBridge (formerly Colony Capital) from selling its stake in two developments. Oaktree Capital Management initially lined up a bid to take over Colony Capital’s stakes and by October 2020 was one of a number of known bidders for the Colony stake. 

RGRE initiated high court proceedings to prevent the sale of part ownership of Fibonacci Square and Spencer Place to U.S. investor Fortress Investment Group late last year, stating that it was not consulted on the sale beforehand.

In October last year RGRE gained a temporary injunction to prevent Colony Capital from appointing a receiver to the joint venture, called Waterside Block 9 Developments Ltd, which was developing the Waterfront scheme. Colony owned a 70% stake in the development vehicle.

The parties were however warned that they “couldn’t fight out their war on affidavit” and the dispute was partially resolved in November.

Why would Ronan wish to sell up?

The idea of selling at least one of the three schemes hasn’t come as a shock. Plans to sell at least one of the Dublin properties have been on the cards for 18 months. In July 2020 RGRE and Colony hired Eastdil to advise on the sale of Fibonacci Square in Ballsbridge.

As a self-made developer, Johnny Ronan has worked independently on the majority of his developments and has seen much success over the years. Some commentators have noted that acting as a development manager reporting into funds isn’t the same as being in charge of your own schemes.

Selling could be the right option to draw a line under the litigation and move on to new opportunities. Ronan has a number of options, especially with Dublin’s office market arguably in rude health

Who could buy them?

According to Knight Frank, 2019 saw €3.2B in investment volume in Dublin. This figure fell to €1.28B in 2020 and 2021 also saw subdued investment volume, however there is still plenty of appetite for grade-A office investment.

And, with high-tech blue-chip tenants in the form of Salesforce and Facebook in the mix, the three properties look like a safe long-term investment and could entice a number of suitors.

Three agents, CBRE, Eastdil and Cushman & Wakefield, have been appointed to advise on the disposal.

U.S. private equity giant Blackstone could be a frontrunner for the three properties. The firm beat off competition from other investors to seal a €400M deal to acquire a large amount of the Facebook HQ site adjacent to the new Fibonacci Square development in Ballsbridge from the Serpentine consortium.

The Blackstone deal meant it owned approximately 340K SF of the overall 870K SF Facebook campus that is being delivered on the former AIB Bankcentre site.

The long leases for both Salesforce and Facebook make the properties attractive to funds seeking safe returns. 

Another U.S. bidder could be Oaktree Capital Management, which had lined up a bid for Colony’s stake in the Fibonacci Square scheme and Salesforce Tower prior to Fortress securing the deal.

Oaktree has a previous relationship with Ronan and is working with RGRE on the former Irish Glass Bottle site in Ringsend.

German funds have taken a keen interest in Dublin schemes in the past few years. Deka Immobilien, a German fund, bought Airbnb’s European headquarters at 8 Hanover Quay late last year for an estimated €41.5M. Airbnb has a lease on the scheme until 2036.  

Also in July 2020 a Deutsche Bank subsidiary bought 317 residential units from MKN Property Group for €145M.

Another suitor is Union Investment, which bought Blocks A and B Parkgate Business Centre, Dublin 8, from Blackstone for €24M in 2021.

From Asia South Korean funds could take an interest, as could Singapore REIT Mapletree, which acquired the 210K SF Sorting Office in the Docklands in 2019 for €240M.

Whatever the outcome, whoever scoops the trio of properties will have a sizeable chunk of Dublin’s newest office space.