Qualceram sells €31m Arklow site

Bathroom fittings group Qualceram Shires has agreed to sell its 13-acre headquarters site in Arklow, Co Wicklow, to a property fund for €31 million.

The company said yesterday that it had exchanged contracts with Brattice Properties, a subsidiary of investment fund Ardawn Developments Two.

The €31 million price agreed compares to a guide price of €35 million and industry expectations that the site would fetch at least €40 million. It is thought Qualceram was cognisant of softening conditions in the property market in setting the final price.

The company put the property up for sale by tender in June and it is understood to have attracted about 20 interested parties before about five final bidders emerged.

The Arklow site, which also houses a Qualceram manufacturing facility, has a book value of €10 million. The company will set off the sale proceeds against debt.

A key condition of the deal is that Qualceram will be allowed to remain on the property for about 2½ years while it seeks a new home in the Arklow area. Qualceram needs shareholder approval for the sale and will hold an egm for this purpose.

"The completion of the sale process and the subsequent relocation of the business to a new purpose-built site is a clear indication of our commitment to improving our customer service capabilities for all of the markets that we serve," said John O'Loughlin, Qualceram chief executive.

Ardawn Developments Two was established in 2006 with €100 million in backing from 500 clients of stockbroker NCB. The fund is the second such vehicle issued by Cova, the asset management group headed by Pat Shine.

The first Ardawn fund raised €56 million from NCB clients. Both funds focus on property development projects, with a concentration on the Leinster area.

With Ardawn Developments Two now fully invested, Cova is set to begin marketing a number of individual sites to its existing client base rather than launching another fund.

Mr Shine said the firm would seek to "create an outstanding development that is sympathetic to the local environment" on the Arklow site, which is surrounded by water on three sides.

Cova was set up in 1998 by Mr Shine, a former partner in PricewaterhouseCoopers, former estate agent Bill Mulrooney, and property developer Brendan Fitzsimons. The company has more than €500 million in assets under management.