AIB makes €368m property sale

AIB has sold part of its Ballsbridge site for €367.75m to the Serpentine Consortium, a syndicate of private individuals and companies assembled by AIB Private Banking and Goodbody Stockbrokers.

The Serpentine Consortium has engaged Blogram Limited, a subsidiary of AIB, to develop the site.

The book value of the site is €1.2m. The development will extend to a total area of 324,766 square feet.

It is intended the development will be let to a company in the AIB group for a period of up to 31 years under a lease with a break clause, exercisable by the tenant after 23 years.

The initial annual rent payable by the tenant will be €16.117m per year and will be subject to adjustment in subsequent five-year rent reviews.

AIB said today that it is anticipated this cost will be more than offset by savings on rent and other costs elsewhere.

The capital benefit (ie the profit after tax) to AIB generated from the transactions is in the region of €160m. This benefit will be derived over three years, beginning in 2005. AIB is to reinvest the proceeds of the transactions in its core banking business.