AIB to offload 36 branches
AIB is gearing up to sell 27 bank branches and nine leased premises across the country which were closed at the end of October as part of its efforts to return to profitability in 2014. The bank lost €1.1 billion in the first six months of this year.
The bailed out and State-controlled bank has put the closed branches into six different batches and appointed mainly Dublin agents to sell the buildings on an individual basis in the new year.
In the meantime the agents will be trying to gauge the level of interest in the branches and the likely selling prices. Leased premises may prove the most difficult to shift either because of the length of the contracted leases or the fact that they are probably over-rented.
One thing is certain: AIB will get nothing like the prices it fetched for branches between 2006 and 2010 simply because it is no longer interested in leasing them back. And not only have property prices taken a nosedive in the meantime – values in most of the towns and villages where the bank branches are about to come on the market have fallen by anything up to 80 per cent – but most of the sales are likely to be confined to cash buyers as bank borrowings are not generally available.
AIB aims to shut one in four branches as part of its reorganisation. The offices already closed or on the hit list typically carried out about 20 per cent of the volume of transactions of other branches. The first tranche of sales is part of an overall plan to close 67 branches by next year.
In Dublin city there will be four sales: Smithfield; Templeogue; Terenure; and Annesley Bridge on the North Strand. Within the greater Dublin area, there will be sales of buildings in Rush, Dunshaughlin and Cootehill. The selling agent is likely to find it more difficult to assign the leases on the bank branch in Dunboyne which run until 2019 and 2020 and involve a rent of €49,300.
In the Connaught/Donegal division, the bank will be looking for buyers for branches in Ballaghadereen, Ballyhaunis, Carraroe, Cooloney and Kiltimagh. Four other leased premises with the lock-in periods running from two to 13 years are to be marketed in Boyle, Charlestown, Milford and Moate.
The fourth batch covers Tipperary, Limerick and Clare with branches at William Street, Limerick, Borrisokane, Doon, Kildysart, Killenaule and Kilkee. There are leased premises in Newport and Portumna. Another agent is to be asked to find buyers for vacant premises in Baltinglass, Clogheen, Kilmacthomas and Tallow. There is also a leased building in Bunclody. The final batch involves branches in Cork, Kerry and Limerick. The buildings for sale are in Ballydehob, Buttervant, Drumcollogher, Schull and Tarbert. Another building in Rathmore is leased for just over a year at a rent of €15,000.