PortfolioSale: Half of the 36 branches sold by Bank of Ireland in its recent sale and leaseback deal were bought by Bernard McNamara, Quinlan Private and Friends First, writes Jack Fagan.
Leading property developer Bernard McNamara has added three bank branches to his extensive property portfolio. He is the new owner of the Bank of Ireland branch at the junction of St Stephen's Green and Merrion Row, one of the best located of the 36 buildings disposed of in a sale and leaseback deal by the bank for almost €240 million.
McNamara, who bought the three branches for his "personal pension fund", apparently faced stiff competition for the branch near the Shelbourne Hotel where he also holds a major stake. He is thought to have paid around €12 million for the bank branch which will produce a rent of €351,725 per annum. He also acquired another branch at Upper Leeson Street which has obvious redevelopment potential if the bank avails of break options after either five years or 10 years.
The third branch acquired by McNamara for almost €3 million is at Arran Quay and, if the bank eventually moves out of the building, it could be redeveloped to face on to the rejuvenated Smithfield area where a site at the rear is currently on the market. McNamara is also understood to have other properties in this part of Dublin 7.
Two other groups, Quinlan Private and Friends First, also acquired groups of bank branches in the first ever sale and leaseback deal by the Bank of Ireland. Quinlan bought eight branches while Friends First successfully tendered for seven. The outcome means that 18 of the 36 branches were bought by McNamara, Quinlan and Friends First. The eight branches bought by Quinlan Private are in Dublin and the provinces, and these were bought for individual investors rather than one of the company's funds.
Friends First paid close to €55 million for seven branches which were among the best in the portfolio. The yield will vary from 3 per cent to almost 3.5 per cent. The buildings are on the South Mall in Cork, O'Connell Street, Phibsborough and Blackrock in Dublin, Athlone, Newbridge and Dundalk. Ann Hargaden of Lisney, who advised Friends First, said yesterday that she was not yet in a position to comment.
The leading Galway property developer Frank O'Malley has emerged as the purchaser of the landmark Bank of Ireland at Eyre Square in Galway. He has been one of the most dynamic developers in Galway over the past two decades and in recent years has concentrated on the Dublin market. He is understood to have paid around €18 million for the Galway building, one of the finest of its kind in the city. The bank has taken a 25-year lease on the facility at an initial rent of €577,000 with a guaranteed 15 per cent uplift on the first rent review in five years.
Another property developer Robert Butler is thought to have paid close to €19 million for the Bank of Ireland branch at O'Connell Street in Limerick which will be rented at almost €600,000 per annum.
Other, lesser known, property developers were also among the purchasers of several bank branches around the country at yields ranging from 2.6-3.7 per cent.
Robert Murphy of CBRE, who advised Bank of Ireland, said he was extremely happy with the response to the sales campaign and the outcome which was "completely transparent".
