In what will be the largest ever office letting in this country, Bank of Ireland's new back office HQ will be at one of two north docklands sites, writes Jack Fagan
The search for a new back office headquarters for the Bank of Ireland has been narrowed down to two sites in Dublin's north docklands. A third location in Sandyford which had received considerable attention in recent weeks is now thought to be out of the running because of the distance from the city centre and traffic congestion in the area.
The bank is due to announce before the end of this month the preferred location for the office complex which will provide 51,095sq m (550,000sq ft) of space. It will be by far the largest ever office letting in this country.
Once terms have been agreed on the deal, the bank is then to draw up a shortlist of preferred developments from which it will choose its new high profile front office headquarters. It will have a floor area of less than half the size of the back office building at 23,225sq m (250,000sq ft).
The locations identified as suitable for the back office are at the rear of the former Brooks Thomas site along Mayor Street, and closeby at Eastpoint Business Park off East Wall Road.
With most new office buildings now offering fairly similar facilities and fit-outs, the group of executives advising the bank will be paying particular attention to accessibility, proximity to public transport and whether each site offers a "safe working environment" close to shops, restaurants and other facilities.
As well as meeting these criteria, developers will be expected to offer a significant rent-free period, a contribution towards fit-out costs and, most important of all, a significant discount on the rent.
Although rents in secondary locations generally range between €430 and €484 per sq m (€40 to €45 per sq ft), the likelihood is that the two competing developers may pitch the rents between €269 and €376 per sq m (€25 and €35 per sq ft) in the hope of securing the bank as a tenant.
It is not unusual in major office lettings for developers to accept an artificially low rent for the first five years in the knowledge that it will be reviewed to open market value at the first review.
Should it opt for Mayor Street, Bank of Ireland will have to settle for a site at the rear of the proposed new headquarters of Anglo Irish Bank and behind solicitors O'Donnell Sweeney. Dublin's most prolific developer Liam Carroll, who owns the Brooks Thomas site, will be hoping to convince the bank that, while Mayor Street is a marginal location at present, it can be transformed by the various office developments and particularly a new headquarters for the bank which is not due to be handed over until 2011. By then the new Luas service will be up and running and the nearby Point Depot will have its new shopping centre and enlarged concert venue.
If Liam Carroll's Mayor Street site is favoured for the back office then he could end up with the front office as well on his Hammond Lane site on the opposite side of the river. This latter site is one of the locations on the shortlist for the front office.
Eastpoint Business Park has the advantage of being a mature office location with 111,500sq m (1.2 million sq ft) of space in 35 buildings. It is already served by a Dart station and the Port Tunnel, and will be within easy walking distance of the planned Luas service. The site being proposed for the bank is to be developed on a joint venture basis by owners Earlsfort and Dublin Port Company.
The Sandyford site also has the Luas link and is beside Beacon South Quarter, the new shopping enclave being completed by Landmark Developments.
Coincidentally, Paddy Shovlin and two of his partners in Landmark hold a 50 per cent stake in the existing Bank of Ireland headquarters on Baggot Street. The group joined Quinlan Private in buying the bank building in 2006 for around €200 million.
Florence Stanley of CBRE, who is advising the bank, said she was precluded from making any comment at this stage.
