Monday 17 March 2008

'Lots of options' available for Ballsbridge site if plan rejected

PROPERTY developer Seán Dunne says he has a "very conservative" debt-to-equity ratio and has "lots of options" available if his plans for his site in Ballsbridge, Dublin, are not approved.

Mr Dunne said at the weekend that he had had a meeting recently with his bankers who had remarked that it was "good to be dealing with a superprime asset. I consider it to be a superprime asset."

Mr Dunne paid €379 million for the Jurys and Berkeley Court hotels in 2005 and plans to replace the hotels with a substantial mixed use development.

Last week Dublin City Council's planners granted permission for much of the plan but turned down permission for a 37-storey residential tower and an office block.

The decision is being appealed to An Bord Pleanála and Mr Dunne said he expected a decision by the end of this year.

On the Marion Finucane Show on RTÉ Radio 1, Mr Dunne said his purchase of the site was not a gamble. "Ballsbridge probably has the dearest . . . property in Ireland, probably in Europe. You can buy property cheaper in Paris than in Ballsbridge."

He did not think that this was "nuts".

Mr Dunne said it was "illogical" for the current zoning to allow residential, hotel, embassy and cultural development on the site, but not office development. Given the zoning that currently existed, he had known the planners had to refuse the office element of his submission.

"We don't need office permission to make this stand up," he said. "We can put apartments where those offices are."

On the issue of the tower, he noted that the planners had only said it was "leaning towards excessive".

He said that apartments produced a better yield in Ballsbridge than offices. Offices would yield about €1,400 a sq ft whereas he planned to get €1,500 a sq ft for his apartments.

He said a mix of apartments and offices would be the best for the site.

Mr Dunne also said the hotels operating on the site were not covering the interest bills on his bank loans. However, he had "an income stream from many properties. I would think the gearing of our company is on the very conservative side." He had a large equity stake of his own in the project, he said.

"We have large borrowings but we have large assets. We have 20 acres of land in the centre of Dublin."

The world had changed dramatically since he had bought the site but "the banks in Ireland are on a very solid footing. They are in the market still to lend money to property, to viable projects."

He had lots of options for the site, he said, including leaving the hotels open, closing the hotels, leaving the site vacant or "turning it into a parking lot". He could hold on to the site, which would increase in value.

He said he could "go with the zoning" and put up the apartments, leave the gates and railing around the site "and leave it so only the people living there can ever walk across the site again. That is probably the most economical proposal we can do."

However, he had a vision for what was a long-term project. If the plan was turned down, "then we'll go back to base and we'll start all over again". He believed his plan would be approved.

Asked if he had sympathy for nearby residents who were facing years of construction work on the site, he said that he did, but that one way or the other the site would be developed.

Mr Dunne said he believed the residential market would not pick up again until the end of next year.

The Irish Times

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