Guinness-owner Diageo is understood to have lined up UK property firm U+I as the preferred bidder for its coveted St James Gate redevelopment scheme.

The shortlist was whittled down to one as long as six months ago, the Irish Independent understands.

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However, the contract has not yet been confirmed amid negotiations to agree upon a strategy and detailed plan to drive forward the scheme, and the sides remain in negotiations.

Final bids from three shortlisted parties – U+I, Irish builder Ballymore, and US investor Hines – were submitted almost a year ago.

The 12-acre city centre site to be carved out of the world famous brewery will be worth as much as €1bn as a mixed commercial and residential district in Dublin city centre.

A spokesperson for Diageo yesterday said that the drinks giant is not ready to name a partner for the massive development.

“The selection and evaluation process is ongoing and we remain as focussed as ever on finding the right partners to deliver a world-class urban quarter,” a spokesperson said.

It means there is little sign of progress at the development.

UK stock market listed developer U+I is a big player internationally, but is relatively new to the Irish market, where its focus has included large-scale refurbishment of commercial properties, working with partner Colony Capital and local builders.

Diageo is to redevelop 12 acres of its property in Dublin 8 for housing, offices, shops and businesses to create a new quarter for the city.

The St James’s Gate site is one of the biggest ever development schemes in Ireland.

Liam Reid, corporate relations director with Diageo Ireland told the Public Relations Institute of Ireland (PRII) annual conference last year that given the development would be a long-term project, which would have lasting consequences for the city, it had embarked on extensive consultation.

Diageo also opted to manage the development itself rather than sell the site, which will sit alongside its historic brewery.

The company’s leadership has ‘set an ambition’ to build a world-class urban centre.

Initially around 16 developers expressed an interest in working on the site.

That number was narrowed down to six and further whittled down to three firms by last September. But the final cut to a preferred bidder has never been formally announced.

Slow progress developing key sites is a frustration for Government, which has relaxed planning rules and building regulation in a bid to accelerate delivery – with so far limited results.

Yesterday, the Sunday Independent reported that the development of Cherrywood, the country’s most significant housing development, is at “high risk” of being severely delayed by a €62m funding shortfall.

Meanwhile, Nama is currently seeking a partner who will contribute at least €125m for an 80pc stake in the huge Poolbeg West development scheme in Dublin. The almost 400 acre Old Glass Bottle site will have 3,500 homes and one million square feet of commercial space when it is built, but has already been subject to a decade of delays.

The agency and Minister Eoghan Murphy are also under pressure politically to break the delivery deadlock and ensure homes are finally delivered on the Dublin 4 site, sooner rather than later.

St James’s Gate bidders Ballymore Group and Hines, and potentially U+I are all likely to be in the hunt for the Poolbeg West contract.

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