A sale set for interest

A BANK branch which was bought as a sale and leaseback investment for €6.5m by businessman and developer David Dwyer is back on the market, for €1.4m.

And, in an unusual reversal of banks and lending, the lease comes with ‘a parental guarantee’ from AIB.

New to market is the AIB bank branch on Cork city’s main Douglas Road, 250 metres from the affluent suburb’s epicentre.

It was one of 25 AIB branches to be sold to funds and private investors back in 2007, and was the most valuable of the AIB investments sold outside of Dublin branches. Mr Dwyer confirmed his purchase at the time, via DTZ Sherry FitzGerald, and it showed about a 3% yield. There had been huge interest in this branch sale in particular, and other Cork AIB branches bought at the time for investment for between €3m and €4m included Carrigaline, Midleton and Western Road. AIB is currently closing a number of branches.

The Douglas Road branch was purpose-built in 1997 for AIB after developers Gable Holdings acquired much of the grounds of the former Coláiste Mhuire (now Douglas Community School) for residential development of large detached homes at Reeveswood and for 30 duplexes and apartments behind this 5,400 sq ft bank branch. It was built to replace an older branch nearby.

Down from a 2007 high of €6.5m now it is being sold again with a €1.4m price guide quoted by agents Casey and Kingston, it offers an initial yield now of c 14%.

It’s held on a 20-year lease to a wholly-owned subsidiary of AIB, with full parental guarantee from AIB, on FRI terms from 2007. AIB have a right to three further renewals, for a possible 80 years total occupation, and there’s a break clause in 2020.

Rent is €214,000 pa, on upward only terms.

The AIB branch on Douglas Road has parking for 35 cars, on a c half-acre site. It has 3,200 sq ft at ground level, plus a further 2,200 sq ft overhead.

Details: Casey and Kingston, 021-4271127