Ulster Bank takes more space at George's Quay

OfficeMarket: With Ulster Bank to occupy three buildings at George's Quay, the bank's move will fuel speculation over its expansion plans south of the Border, writes Gretchen Friemann.

Ulster Bank has decided to significantly enlarge its headquarters in the Republic by taking over the lease on PricewaterhouseCooper's (PwC) office block at George's Quay.

The move means the financial organisation, which is owned by the Royal Bank of Scotland, will now occupy three buildings at George's Quay and is likely to fuel speculation over the company's expansion plans south of the Border.

Ulster Bank is the leading bank in Northern Ireland but its operations in the Republic are growing rapidly and last October the group's chief executive Cormac McCarthy claimed the institution could overtake AIB and Bank of Ireland as the biggest lender in the Republic.

The addition of PwC's 4,181sq m (45,000sq ft) office block gives the bank a total of 9,755sq m (105,000sq ft) at its Dublin headquarters.

According to informed sources, the rent on PwC's building, which is owned by the Irish Property Unit Trust (Iput), is around €2 million a year.

Declan O'Reilly of agent HT Meagher O'Reilly handled the deal but declined to comment on the negotiations.

It is understood the lease has another 15 years to run with a break option in 2013. The last rent review was conducted in March 2006. According to industry sources the deal is an "excellent outcome" for Iput, as it has replaced one blue-chip tenant with another despite the "relatively onerous lease terms".

Iput's block at George's Quay, which is located opposite the Custom House, was constructed in the early 1990s and is surrounded by new developments offering third-generation facilities.

There are also numerous projects in the pipeline, including Iarnród Éireann's proposal to construct a 14-storey office block above nearby Tara Street station.

Given the age of Iput's property, some sources have speculated that it will be redeveloped in the medium term. However, any decision is likely to be made in conjunction with Irish Life, which owns Ulster Bank's existing offices at George's Quay.

PwC is due to move into its new 18,581sq m (200,000sq ft) headquarters at Treasury Holding's Spencer Dock complex within the next few months.

The lease assignment to Ulster Bank means the international consultancy firm has offloaded both its rental liabilities.

Treasury Holdings is picking up the tab on the remaining 13-year lease PwC holds at Gardiner House at Wilton Place, where the current annual rent is €2.65 million.

The property was recently sold by Iput to the Co Kildare developer, Gerry Conlon, for more than €82.5 million.