Representatives of the bank and developer Bernard McNamara have had detailed discussions on the likely rental terms for 27,871sq m (300,000sq ft) of space at the €1bn scheme planned for the Burlington Hotel site in Dublin 4, writes Jack Fagan
THE SEARCH for a replacement headquarters for Bank of Ireland has switched to a 5.4-acre site that includes the Burlington Hotel in Dublin 4 where developer Bernard McNamara is awaiting planning permission for a mixed-use development.
McNamara, who bought the hotel for €288 million, was granted planning permission last May for a development of offices, retail space, leisure facilities and a medical centre.
Part of the €1 billion project would be located on the site of the former Allianz headquarters which he bought about two years ago for around €100 million.
Representatives of the bank and the McNamara company have had detailed discussions on the likely rental terms for 27,871sq m (300,000sq ft) of space and, while the indications are that the bank may well proceed with the deal, it is not due to announce a decision for at least a month.
Experts in the office market acknowledge that the Burlington is one of the best available office sites in the city because of its closeness to the main shopping and commercial areas and the office hubs in Dublin 2 and Dublin 4.
Even before the bank showed an interest in the Burlington site, business giant KPMG was known to have considered the same site for its planned new headquarters which are likely to be of a similar size to the scheme proposed for the Burlington site.
Bank of Ireland's current search for new premises follows its decision to end "exclusive talks" with developer Liam Carroll who had offered attractive terms on a proposed office development at Mayor Street in the North Lotts area of the Dublin docklands.
Mr Carroll is facing a lengthy delay because of a legal dispute over title to a secondary piece of land he acquired to allow the bank to locate its back office there.
The bank's strategy is to provide a separate front office of 23,225sq m (250,000sq ft) at a later stage.
However, sources in the bank suggest that if they come down in favour of the Burlington site, it might well be used for a part front office and part back office facility.
An Taisce has appealed against Dublin City Council's decision to grant permission for the redevelopment of the hotel and the Allianz sites.
The permission also provides for 185 apartments as well as ancillary facilities.
One block, which will front Sussex Road and the Mespil Estate, will be part six and part eight storeys.
A second block, fronting Burleigh Court and Mespil Road, will have eight storeys over a double basement.
A third block, which will face Burlington Road, is to rise to eight storeys with a recessed level at the eight floor and two partially recessed floors at the sixth and seventh floors.
While the Burlington Hotel site has been the most important location targeted by the bank, it is by no means the only site which has been looked at.
The bank also has been studying several other locations, including Heuston South Quarter beside Heuston Station in Dublin 8 where Eircom is the anchor tenant, East Point Business Park, and Cumberland House on Fenian Street which stands on a site of 1.64 acres and will eventually be enlarged.
Agents representing the bank have surprised developers by seeking to cap rent increases over a full 25-year lease term rather than allowing the rent to fluctuate in line with open market rates.
Although the level of enquiries for new office space in Dublin city has declined in the past three months, it is considered unlikely that developers will agree to a long term cap on rents, as well as conceding rent-free periods and other concessions.
The bank's search for new office space following the sale of its old headquarters on Baggot Street has been complicated by recent falls in the company's market capitalisation.
