Independent - June 17, 2009
AIB is seeking to raise a further €20m from its real estate portfolio through the sale and leaseback of seven prominent branches around the country.
The bank has instructed CB Richard Ellis to sell its branches in Swords, Navan, Dundalk, Monaghan, Kells, Castleblaney and Maynooth on a sale and leaseback basis.
AIB has unlocked over €1bn in shareholder equity for its core business activities since the sale of AIB Bankcentre in Ballsbridge in 2005/2006 and it has sold 40 branches.
The latest tranche follows on from the recent sale of three branches in Dublin, Naas and Mullingar. All the branches will have 20 year leases with AIB and a break option in year 15. The initial rents will be subject to upward only reviews at five year intervals.
"Since the programme started yields have moved out significantly," Colm Luddy of CBRE comments.
"However, demand in the investment market is for long leases to strong covenants and these investments will offer investors good value and very secure income."
The Navan AIB premises is expected to make €5m and off a rent of €335,000 will yield 6.5pc. The Dundalk branch will be rented at €239,000 and is valued at €3.4m again yielding 6.5pc.
Swords is expected to make €3.4m too and off a rent of €248,000 will provide in excess of 6.5pc. Maynooth will have a similar yield off a rent of €235,000 and a €3.33m. price.
The Monaghan branch will be leased at a rent of €200,000 and is expected to sell for in excess of €2.7m yielding in excess of 6.5pc as well.
Castleblaney will have an initial rent of €86,000 and is expected to achieve in excess of €1m, yielding over 7pc. The Kells property will offer a similar yield with a rent of €84,000 and a price in the order of €1m.
Another AIB branch in Cork City has been for sale for some months.
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