Investor pays €94m for 30 bank buildings

Developer Joe Layden has paid €94 million for a Bank of Ireland portfolio in a sale and leaseback deal which shows an initial yield of 3.9 per cent, writes Jack Fagan

A single purchaser has bought 29 retail branches of the Bank of Ireland as well as its call centre in Kilkenny. The Layden Group, headed by property developer Joe Layden, has paid €94 million for the portfolio in a sale and leaseback deal that will show an initial yield of 3.9 per cent.

Layden has been involved in the commercial and retail property markets for 30 years and has substantial property interests in Dublin, the provinces and Germany.

At one stage he owned an extensive site that now forms part of the Dundrum Town Centre. His Dublin property interests include George's Arcade between South Great George's Street and Drury Street, and the Epicurean Food Hall in Lower Liffey Street. He is a native of Co Leitrim and a former captain of Portmarnock Golf Club.

The decision by the Bank of Ireland to sell the 30 properties to a single purchaser is hardly surprising, given that it is easier to deal with one landlord rather than many.

Robert Murphy of CB Richard Ellis, who handled the sale, said the level of interest in individual branches was "high" but there were also a number of bids for the entire portfolio at yields that recognised the potential for strong retail growth and long-term development opportunities.

Murphy had been guiding €89.5 million for the entire package of properties which are spread throughout Ireland. Eight of the bank branches are in the Dublin area - Killester, Drumcondra, Rathmines, Raheny, Glasnevin, Skerries,Whitehall and Ballyfermot - and others are in provincial centres, including Limerick, Cavan, Monaghan, Mallow, Enniscorthy, Fermoy and Arklow.

The entire portfolio will produce a rent roll of €4,101,318 per annum under new 25-year full repairing and insuring leases with five-yearly upwards-only rent reviews. The bank will have a break option after 15 years in all cases.

Layden has the option at this stage to choose in each case whether to settle for a fixed 15 per cent uplift in rent after five years or a review to open market rental values. Rents in the portfolio range from €61,372 for a branch in Edenderry to €778,669 for the back-up office building in Kilkenny. The highest value bank branch is in Mallow where the building will be leased back at €235,387. Other high rents in the package are: €210,504 in Limerick; €216,081 in Ballina; €169,479 in Loughrea, Co Galway; €145,202 in Ballyfermot; €138,353 in Roscommon; €133,592 in Longford; and €112,542 in Whitehall, Dublin.

Layden will be by far the biggest owner of bank branches in Ireland. Another property developer, Gerry Gannon, paid €100 million last October for 12 AIB branches. Around the same time developer Bernard McNamara bought three Bank of Ireland branches in Dublin for an estimated €18 million. In Galway, yet another property figure, Frank O'Malley, paid €18 million for the landmark Bank of Ireland at Eyre Square.