Sean O'Brien, property investment director of Irish Life, has surprised the investment industry by announcing his intention to join Insignia Richard Ellis Gunne as head of its investment division. He will also become a director of the company.
Easily the most active institutional player in the investment market, he was responsible for doubling the size of the Irish Life portfolio from £600 million (#761.8m) to £1.2 billion (#1.52bn) in just over five years. The rapid growth in the fund coincided with five years of spectacular returns by the industry, averaging around 25 per cent per annum.
He acknowledges that since the market peaked in 1998, returns have been coming down to more sustainable levels. "Over the next few years I expect the market will be providing returns of 12 to 15 per cent per annum. Given the volatility of the equity market, these returns will still be very good."
O'Brien was involved in two high profile deals in recent weeks, the purchase of BT2 on Grafton Street for £17 million (#21.59m) and the swopping of a 40 per cent stake in the ILAC centre for a 70 per cent holding in the British Land-owned St Stephen's Green Shopping Centre. Irish Life is also paying over £50 million (#63.49m) as part of the transaction. The deal will enable Irish Life to realise an ambition it has harboured for over a decade.
Since taking over the Irish Life fund in 1995, O'Brien has implemented a number of important strategic policy changes. First of all he announced that Irish Life would no longer have a role as a developer, merely as an investor and manager of properties. He also opted to purchase investments on a joint venture basis with other institutions and private developers.
Examples of this include the proposed Airfield Business Park near Swords, Broomhill Business Park and St Stephen's Green House. The third major change involved the setting up of syndicated funds - a form of unitisation - to allow private investors to invest in properties such as Seagrave House at Earlsfort Terrace, East Point Business Park in the Dublin docklands and the St Stephen's Green Shopping Centre.
The minimum size of investments in most cases is £50,000 (#63,486) but with the Government implementing tough anti-speculative measures to keep investors out of the residential market, the Irish Life funds have offered a rewarding alternative to those determined to concentrate on real estate.
O'Brien, a native of Cork, has been with Irish Life for the past 22 years. As an engineer he worked on a number of developments, including the ILAC centre. He later qualified as a chartered surveyor and was appointed property investment manager when Bill Nowlan left the company in 1995 to set up his own practice as a property adviser. O'Brien feels his skills are transportable. "Gunne approached me to head up its investment side. It is a new challenge I look forward to. Gunne is a young company with a lot of potential for growth."
