€28m offer for AIB branch

AN IRISH family trust has emerged as the highest bidder for the AIB bank branch on Dublin’s Grafton Street. Should the bank accept the offer of just over €28 million, it will provide a return of 5.9 per cent.

However, sources in the commercial property market yesterday indicated that the offer is conditional on the bank agreeing to a shorter lease of the premises, which has dual frontage onto Wicklow St and Grafton St. The sale and leaseback deal offered by the bank includes a 20-year lease with a 15-year break option. This would effectively allow the bank to stay on indefinitely if it wished in what is its best located bank premises in the country.

Should AIB be unwilling to change the lease terms, it can invite the bidder to drop the condition or accept slightly less than €28 million from a second bidder, thought to be based in the UK. Around seven parties, including four from the UK, submitted “final offers” for the bank branch which will produce a rental income of €1.8 million. Colm Luddy of agent CBRE, which had initially guided between €25.5 million and €26.5 million for the building, said yesterday that he had no comment to make at this stage.

Last summer German banking group DekaBank bought the Tommy Hilfiger store on the opposite side of Grafton Street for €25 million, reflecting a yield of 6.4 per cent.