Cornelscourt bank down 70% to €4.75m

JACK FAGAN
Commercial Property Editor

An ultra-modern bank building rented by AIB at Cornelscourt in Dublin 18 will be of interest to Irish and overseas investors when it is goes for sale today along with an adjoining site for €4,750,000. The investment will show a net initial return of 7.25 per cent, according to Jane Dolan of selling agents DTZ Sherry FitzGerald.

The asking price is a long way from the €16 million paid for it at the peak of the property boom in 2007 by property developer Paddy Shovlin when he had to settle for a yield of no more than 2 per cent. Bank of Scotland Ireland, who provided the original funding, has now instructed receiver Simon Coyle of Mazars to dispose of the asset.

The original €16 million sale and leaseback arrangement was particularly profitable at the time for AIB, which had managed to keep development costs under €7 million.

The distinctive building occupies the site of the first, experimental drive-through bank in Ireland (there was another one in Baggot Street), which opened in 1990 but closed 12 years later because of changing banking trends and more particularly the decision by the bank to encourage customers to do their banking electronically through ATM machines.

AIB then secured planning permission to demolish the single-storey circular building and replace it with a landmark three-storey block to house its South Dublin Business Centre as well as a branch office. The successful design by architects Kavanagh Tuite means that the building with an overall floor area of 1,685sq m (18,145sq ft) is highly visible from all sides of the N11 and the Old Bray Road. The twisted arrangement of the floor plates allows for a play on scale between the more polite scale on the Old Bray Road in Cornelscourt village and a more upright and bold scale towards the N11, effectively a closed face as opposed to the open face towards the village.

The building is organised around a large, tall banking hall entered through a generous covered porch. The banking hall is a broad and upright space naturally lit on two sides.

AIB is now paying a rent of €360,000 per annum on a 40-year full repairing and insuring lease with upwards-only rent reviews. The bank has a break option towards the end of 2022. It also has the use of 45 surface car parking spaces.

The investment property occupies 0.07 of a hectare (0.27 of an acre) out of the overall site area of 0.47 of a hectare (1.16 acres). The expectation is that whoever buys the investment will also develop further facilities on the site, which is zoned for a mixed-use neighbourhood centre.

Shortly after buying the property, Mr Shovlin considered developing two high-rise apartment blocks. The plan was judged to be too large by the local authority's planning department and the scheme was abandoned. The latest indications are that the planners may now endorse a mixed commercial and residential scheme on the well located site.

The bank premises is located a short distance from the well-known Cornelscourt shopping facility where Dunnes Stores built Ireland's first big box shopping store. Dunnes Stores also own a vacant site close to the AIB building.

AIB availed of the strong property market in 2006 and 2007 to embark on the sale and leaseback of 33 branches throughout the country. Most of these have since experienced a dramatic fall in value. Around the same time AIB also negotiated a sale and leaseback of its Ballsbridge head office for €350 million.