An ultra-modern bank building rented by AIB at Cornelscourt in Dublin 18 attracted combined bids of almost €70 million before being sold to a Dublin investor for close to €5 million.
The exceptional level of domestic and overseas interest in the investment reported by Jane Dolan of DTZ was due in part to the unique style of the building and the strength of the covenant, but more particularly to the fact that the sale includes a development site of almost an acre beside the bank.
The €5 million sale price is well short of the €16 million paid for it during the property bubble in 2007 when it was bought by property developer Paddy Shovlin at a yield of no more than 2 per cent.
Bank of Scotland (Ireland), who provided funding for the investment, triggered the latest sale by appointing Simon Coyle of Mazars as receiver to the property.
AIB spent less than €7 million on building and fitting out the bank before selling it on to Shovlin at €16 million.
The three-storey landmark building occupies the site of the first, experimental drive-through bank in Ireland – there was also one on Baggot Street – which opened for business in 1990 and closed 12 years later following the switch over to electronic banking through ATM machines.
AIB then secured planning permission to demolish the single-storey circular building and replace it with a substantially larger block to accommodate its South Dublin Business Centre as well as a branch office. The building has an overall floor area of 1,685sq m (18,145sq ft) and is highly visible from both sides of the N11 and the Old Bray Road.
AIB is paying a rent of €360,000 per year on a 40-year lease with upwards-only rent reviews. The bank has a break option nears the end of 2022.
The investment property occupies 0.07 of a hectare (0.27 of an acre) out of the overall site area of 0.47 of a hectare (1.16 acres).
The new owner will have the option to develop or sell the adjoining site which has a mixed use zoning.
At one stage Mr Shovlin considered building two high-rise apartment blocks but the plan was judged too large by the local planners.
The latest indications are that the planners may endorse a mixed commercial and residential scheme.