Three years ago, Bryan Cullen, David Coleman and JJ Murphy barely registered on the radar of most Irish business advisers. Cullen, a 42-year-old Dubliner, was developing the occasional property with the legendary builder Jack Cosgrave. Coleman headed his Dublin solicitor practice Lavelle Coleman, and Murphy was busy building houses in Wexford. The three men came together to develop a hotel in Wexford, a transaction that garnered little attention.

Successful? Yes. Serious players? Hardly.

In the last two years, through the bidding vehicle Precinct Investments, Cullen, Coleman and Murphy purchased the Gresham Hotel Group for €107m and are now attempting to buy Jurys Doyle for more than €1.5 billion. The three relatively obscure entrepreneurs have been catapulted to the forefront of Irish business, sizing up two publicly quoted hotel companies in a little more than 18 months.

If they snare Jurys Doyle, the Precinct investors will be among the most recognised figures in Irish business, but they will also be among the most heavily indebted.

Precinct will take on borrowing of €1.2 billion in a Jurys Doyle deal, and put forward €300m of equity. A large chunk of the equity, however, will also be borrowed, secured against the three men’s other assets. Leverage — the ability to raise vast amounts of cheap debt to finance big ticket deals — has been the vital ingredient fuelling the deal makers in their multi-billion-euro property-buying spree.

CBRE Gunne estimates that Irish investors spent €3 billion buying property in Britain alone last year. Up to €2.5 billion of that sum would have been borrowed.

Wealthy Irish entrepreneurs have developed an insatiable appetite for debt. Anglo Irish Bank, the preferred banker of the emerging entrepreneurial elite, more than doubled its loan book from €11 billion at the end of September 2002 to more than €23.8 billion at the end of its 2004 financial year.

A very sizable slice of the new lending has fuelled the property splurge.

Between the UK and Ireland, AIB’s exposure to the construction and property sector spiralled to €16 billion in 2004 from a little more than €6.1 billion in 2001. AIB’s exposure in Ireland, not including residential mortgages, has risen to more than 15% of its loan book. In 2001, it represented just 7.4%.

However, the country’s love affair with debt, and the London property market, could soon begin to wane. Even the power of leverage cannot counteract inflated property values.

Evidence of the highly geared spending spree abounds. Michael Whelan, a Longford builder, purchased Victoria House in central London for £223m (€324m) for his “children”. Whelan’s Moritz Holdings, in the year to the end of last June, shouldered debt of more than €400m on its balance sheet.

Clients of Anglo Irish Bank purchased an office building close to the United Nations headquarters in New York last month, and put up just $32m (€25m) of the total purchase price of $222m. The rest was debt.

The dealmaker Michael Tunney raised just £10m from a clutch of high rollers including the publisher John Kerry Keane to finance the purchase of Jarvis Hotels for £159m in 2003. Allowing for existing borrowings, the new owners of the British hotel chain started business with £212m of debt hanging around its balance sheet. Tunney has since raised more than £85m through selling hotels, and told shareholders that further disposals of 11 non-core properties will reduce debt to “conservative levels”.