The Paddy McKillen Jnr backed firm behind the Clery’s Quarter development on Dublin’s O’Connell Street last August received €21.8 million for the sale of the hotel site at Clery’s to Premier Inn Hotels.
That is according to new accounts for OCES Property Holdings Ltd which show that investment and interest costs connected to the construction of Clery’s Quarter resulted in the company recording a pre-tax loss of €21.1 million in 2021.
The firm recorded €58,000 in rental income in 2021 and the 2021 loss followed a pre-tax loss of €24.64 million in 2020.
The directors confirm the sale of the Cleary’s Hotel site at 13,14, and 15 Earl Place to PI Hotels and Restaurants Ltd with a sale price of €21.85 million.
PI Hotels and Restaurants Ltd currently has a planning application before Dublin City Council for a 229 bedroom nine storey hotel for the site.
Against the background of inflationary pressures impacting on the cost of the scheme, the firm in 2022 drew down a further €26.77 million to advance the development.
Clery’s Quarter is due to open in the current quarter of this year.
The directors state that the occupational market remains challenging but that the company has been able to pre-let two major retail units to two key tenants, H&M and Flannels.
Paddy McKillen Jnr’s Oakmount is a small shareholder in the venture that is being driven by a division of New York-based real-estate firm Rockefeller Group – Europa Capital, and another local partner, Derek McGrath’s Core Capital.
The parties purchased the site for a sum understood to be in the region of €63 million in 2018.
The new accounts put a book value of €71.9 million on the property being developed at the end of 2021.
On the risks facing the business, the directors state that the company faces strong competition in the market and rising construction costs.
On the rising costs, the directors state that “towards the end of 2021, further cost increases emerged following the tender and negotiation of packages which were outside of the main contract which were also impacted by material quantity and inflationary pressures for the likes of steel and other items”.
OCES Property Holdings Ltd had a shareholders’ deficit of €28m at the end of 2021 made up of accumulated losses of €57.3 million offset by share capital of €29.3 million.
The opening of Clery’s Quarter comes eight years after the 170-year-old department store was closed suddenly in June 2015 with the loss of more than 460 jobs, shortly after it was bought for €29 million by the Natrium consortium headed by businesswoman Deirdre Foley.