Iconic bank HQ down from €212m to €30-€35m

THE FORMER Bank of Ireland headquarters at Baggot Street, Dublin 2, sold at a high point in the property bubble in 2006 for €212 million, is back on the market with the expectation that it will make between €30 million and €35 million and possibly more, depending on how bullish a view the market takes.

Jones Lang LaSalle, which originally sold the iconic building to a consortium of private investors led by Quinlan Private, Paddy Shovlin, and hotelier brothers Anthony and Patrick Fitzpatrick, is also handling the current sale for receiver Kieran Wallace of KPMG.

Funding had been provided by Bank of Scotland (Ireland), ACC and the Danish-owned Danske Bank which traded as National Irish Bank.

Bank of Ireland completed its relocation to new headquarters on Mespil Road at the end of August when the last group of employees moved out of Baggot Street.

That complex, which extends to 20,493sq m (220,599sq ft), was designed by Scott Tallon Walker and built between 1968 and 1978.

The entire facade is clad in bronze which has weathered to give the characteristic patina of age. The cores are clad with Wicklow granite.

While the original glazing will clearly need refurbishment or full replacement, the ceiling-to-floor glass style provides excellent light and views from every floor.

The general consensus is that whoever buys the complex will probably have to spend as much again on its refurbishment.

One office expert said that fully let at €35 per sq ft at, say, a yield of 7.5 per cent, would give it a completed value of around €450 per sq ft.

“A very extensive high-end refurbishment is unlikely to come in much over €150 to €170 per sq ft all-in, so even allowing for profit and voids, etc, a developer could afford to pay at least the same again per sq ft to buy in the complex, or more if he thinks he can extend the building.”

Irish and overseas buyers looking to capitalise on the redevelopment opportunity will be well aware of a number of high profile firms looking for substantial new buildings, including KPMG, Arthur Cox, Facebook and an unnamed US bank.

John Moran of Jones Lang LaSalle says the former HQ is “undoubtedly Dublin’s best office redevelopment opportunity”. The location was prime, having both the advantages of a prestigious core Dublin 2 address and transport links better than any south docklands location. In addition, it had an excellent car-parking ratio with 220 marked spaces at present.

Though the former HQ has been listed as a protected structure, the Section 57 declaration from Dublin City Council makes it clear that the emphasis is on the protection of the exterior character of the property with greater freedom in relation to the interiors.

One source contends that an extension remains a possibility, especially if sensitive to the existing design.

The rear of Block A could accommodate around 6,503sq m (70,000sq ft). In 2008, city planners rejected an overambitious plan by architects HKR to add two extra storeys in “glass boxes” to two of the three blocks and covering much of the courtyard with a glazed atrium.

Block A is the tallest building with eight storeys plus a mezzanine over a lower ground floor and sub basement. It has a net internal area of 11,516sq m (123,962sq ft).

Block B is five storeys and has a net internal area of 3,084sq m (33,193sq ft).

The other front building, Block C, is four storeys and has a floor area of 5,194sq m (55,914sq ft).

The existing Bank of Ireland branch remains on the ground floor, occupying 843sq m (9,083sq ft) on a 35-year lease from last August with break options in years five and 15. The bank is paying a rent of €295,000.

The lease anticipates redevelopment of the overall scheme and makes allowances for this, including a right to move the branch to equivalent space within the complex.

Margaret Fleming of Jones Lang LaSalle contends that the site offers both “certainty and upside”. She says the minimum quantum of office space was not only certain but already constructed. The parking was certain and built. The location was established and proven to be a long-term winner in the Dublin market. The iconic building lent itself to new branding.

She said all these facts reduced risk, along with a shorter development programme for refurbishment. There was upside in terms of additional space, possible pre-letting while clever refurbishment would be down to the expertise of the purchaser.

Ms Fleming said there had been many players knocking on the door looking for a high value, value added, prime opportunity in Dublin. “This ticks every box and could be a highly successful investment for a buyer with the right skill set.”

RONNIE TALLON'S DUBLIN LANDMARK ONE OF IRELAND'S IMPORTANT MODERNIST BUILDINGS

THE FORMER Bank of Ireland HQ on Baggot Street became a protected structure in 2006 and plans to extend it were rejected in 2008.

It was bought in 2006 by a consortium that paid a Tigerish

€212 million and sought to capitalise on the investment by extending the complex, which comprises three parts, set around a central plaza, with two lower buildings on Baggot Street and a higher building to the rear set well back from the street.

Plans by HKR Architects included proposals to add storeys and put an atrium over the central plaza, something its designer Ronnie Tallon (below), of architects Scott Tallon Walker, predicted would happen when it was sold in 2006.

“It would be a shame,” he said at the time, “because it’s one of the nice spaces that the public have access to.”

The proposed changes were rejected by Dublin City Council planners – who described it as “one of the most important Modernist buildings in Ireland” – on a number of grounds including the belief that “the Bank of Ireland complex cannot be upgraded without having an adverse impact on the protected exterior of the structure.

It is considered that the proposed development would not protect the special character of the protected facade have a significant undesirable impact on the integrity and Miesian character of the complex”.

Tallon said Scott Tallon Walker architects were “very much influenced by Mies van der Rohe at the time and it would have a strong influence of his philosophy of architecture in it”.

The Dublin building, whose two phases were completed in 1968 and 1978, has the same type of facade used on Mies van der Rohe’s 1950s Seagram Building in New York.

“The curtain wall was commissioned in bronze because it’s a material that lasts forever, needs no maintenance and is beautiful,” said Tallon.

“There were lots of stories at the time about it affecting bronze prices, which weren’t really quite true, but the bank did buy the copper ahead of the making of the curtain wall . They bought it very wisely.”

The curtain wall was made in Ireland, by Smith and Pearson, and the furniture designed by the architects also had to be made from Irish materials, said Tallon.

It all speaks of another age, even the building itself is partly on the site of a car plant that assembled Austins.

At the beginning of this year, KPMG took control of the building on behalf of banks that are owed money by some of those who bought it in 2006. – EMMA CULLINAN