AIB set to move to north docklands in record office letting

Enticed by highly competitive rental terms, AIB Capital Markets' likely move to the former Brooks Thomas site in the north docklands will be the largest ever office letting in the State covering 37,160sq m (400,000sq ft)

AIB CAPITAL MARKETS looks set to move its headquarters to a new office development planned by Liam Carroll for the former Brooks Thomas site in the North Lotts area of the Dublin docklands.

The bank had been in negotiations with Treasury Holdings over the former Tedcastles site in the north docklands but, according to sources in the bank, they are now in "exclusive talks" with Carroll's Danninger for the former Brooks Thomas lands.

The indications yesterday were that terms have been broadly agreed and that senior executives in AIB Capital Markets will shortly seek the approval of the board of the bank for a deal with Carroll.

If the transaction goes ahead, it will be the largest ever office letting in the State covering 37,160sq m (400,000sq ft).

Carroll is expecting to get planning permission for a block of at least 20 storeys under a new master plan for the area being prepared by the Dublin Docklands Development Authority.

The master plan is expected to recommend that the current seven-storey height restriction should no longer apply to certain high profile sites on the north quays.

Close by at Spencer Dock Treasury Holdings has lodged a planning application with Dublin City Council for a 33-storey, 400-bedroom hotel alongside the National Conference Centre to be run by Ritz Carlton.

Apart from the height issue, Carroll is known to have offered AIB exceptionally favourable terms which could not be matched by other developers. These are understood to include a rent-free period of at least five years and a rent after that time span "in the €50s per sq ft" (more than €538 per sq m).

Even wealthy companies, such as Treasury Holdings, would not apparently be tempted to match major concessions such as these because of the huge investment involved in building a substantial high-rise block that would not start showing a return for at least five years - and then at a rent level that will inevitably be below open market value.

If, as expected, Carroll is offering even more attractive terms to Bank of Ireland for its new back office headquarters then the likelihood is that he will also secure that deal for the rear of the Brooks Thomas site along Mayor Street.

Bank of Ireland is due to announce in the coming weeks its choice of location for the back office which will be available in two phases, initially a floor area of 27,870sq m (300,000sq ft) to be available in 2011 or 2012.

The second phase of 23,225sq m (250,000sq ft) is likely to be ready for fit-out within a further two years.

By then the proposed Luas service will be up and running while close by the Point Depot will have its new shopping centre, hotel, apartment complex and enlarged concert venue.

The second venue shortlisted by Bank of Ireland for its back office headquarters is the mature Eastpoint Business Park off East Wall Road which is serviced by the Dart.

Although the bank announced its intention to look for a new front office headquarters of 22,225sq m (250,000sq ft) following the sale of its old headquarters in Baggot Street there are indications that it may delay such a move because of a fall of over 50 per cent in the bank's market capitalisation.