AIB Seeking €360 Million Sale Leaseback of Ballsbridge HQ

Irish Independent - January 31 06

AIB is shortly expected to put its Ballsbridge head office on the market at an estimated price tag of €360m. The bank declined to confirm the move yesterday - a spokeswoman saying it had "no comment" to make. The Bankcentre complex comprises a number of different blocks opposite the Royal Dublin Society. The group plans to lease the buildings back from the new owner/owners on a long-term arrangement.

This is a carbon copy of the transaction used by the group to fund the extension of its headquarters complex, a deal that was completed this time last year. Three interlinked blocks, varying in height from five to seven storeys over basement and with 535 car parking spaces, are currently being constructed behind the existing offices. The deals are roughly equal in valuation terms, according to property sources, and each represents by far the largest property transactions in the Irish market.

A year ago, the bank entered into exclusive negotiations to fund its landmark extension in Ballsbridge with the Serpentine Consortium, a syndicate of private investors assembled by AIB Private Banking and Goodbody Stockbrokers, which is also owned by AIB. The price agreed with the syndicate has not been disclosed but property specialists put a €360m price tag on the transaction at the time.

The Serpentine Consortium was named preferred bidder after an open tender process handled by Jones Lang La Salle, the estate agent which is understood to be handling the new sale and leaseback. A spokesman for Jones Lang La Salle said he had no comment to make when asked yesterday.

Some disappointed bidders were critical of the tender process, noting that the successful bidders were clients of the bank. Deloitte Ireland claimed after the event that its bid of €380m, made on behalf of an unnamed UK property fund, had been rejected by the bank, even though it represented a premium of circa €20m over the successful Serpentine offer.

In all, it is reckoned eight investment groups were shortlisted for that sales and leaseback development and that, between them, they represented some €2bn of private Irish money. It is understood that consortium members participating in that transaction were asked to put up €120m in equity, with AIB lending the balance of the investment to the investors.

The funding aspect is what arguably attracted other banks to put in tenders the last time around, and it is expected the same names will be back in the hat this time around. Sphere: Related Content