AIB set for €100m sell-off

AIB is set to make well over €100 million from a sell-off of branches in Munster and Leinster.

The bank made €100m when it sold off 12 Dublin bank branches earlier this year to developer and investor Gerry Gannon for what is believed to be a sub-3% yield.

Now, a further 25 branches, in major provincial cities and towns, are being offered on a sale and leaseback basis to investors.

Last year, AIB sold part of its Ballsbridge Bank Centre to Serpentine Consortium for €367m, showing that property plays are indeed a bank’s best friend.

This latest AIB branch sell-off parallels Bank of Ireland’s similar branch network sale and lease back. Bank of Ireland fetched €237m for 37 branches in recent weeks, representing a 3.2% average yield on an overall rent of €8.6m.

DTZ Sherry FitzGerald in Dublin and Cork are the selling agents for the 25 Munster and Leinster branches, ranging in individual value from just over €1m to €11m, and likely to be bought in a range of ways: either as one lot, on a provincial break-down, or, most likely, in smaller groupings.

The bank believes local investors in each specific location will make the stronger bids, especially where branches have further site development scope.

Heading up the sale process, with best offers sought by November 24, are DTZ investment directors Sean O’Neill in Dublin and Peter O’Flynn in Cork — the former selling 11 Leinster branches, the latter handling Munster’s 14 properties/investments.

Locations include Dublin, Cork, Kilkenny and Waterford cities, along with major towns in Cork, Wexford, Wicklow and Tipperary.

The 25 branches, on new leases, have a rent roll of €3.62m.

On a 3% yield, the portfolio has an investment value of €120.65m, and at a 3% yield, a value of €103m.

Broken down, the 14 Munster branches have a rent of €1.627m. This equates to a worth of €54.25m on a 3% yield or €46.5m at a yield of 3.5%.

The 11 branches in Leinster have a rent of €1.992m, showing a value of €66.4m at 3% or €57m at 3.5%.

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