European syndicate to buy AIB Bankcentre buildings for €70m

A EUROPEAN syndicate assembled by Davy is to pay just over €70 million for four office blocks that form the centrepiece of the AIB Bankcentre in Ballsbridge, Dublin 4.

The investment will give the new owners an initial return of 9.6 per cent.

Agents Jones Lang LaSalle handled the sale of the investment for Aviva, whose original trading company – Hibernian Life and Pensions – bought the four blocks at the peak of the property bubble in April 2006 for €177 million.

The 60 per cent decline in value since then is broadly in line with the general fall in prices in the commercial property market.

However, Aviva has collected around €42 million in rents since it made the investment.

The decision by the European investors to take a significant stake in the depressed commercial property sector will be seen as a vote of confidence in the bank, which is substantially owned by the Government.

Jones Lang LaSalle originally sought €85 million for the four AIB blocks and, though they were twice under offer from a wealthy Israeli investor, Igal Ahouvi, he did not proceed with the purchase.

Aviva has been anxious to sell the buildings since last February as part of a broader programme to increase diversification across its asset portfolio.

All four buildings have been upgraded and modernised on several occasions and link directly to the major extension completed by the bank in 2008. The four buildings extend to 14,280sq m (153,709sq ft) and, along with 175 car parking spaces, are rented by the bank on a 20-year lease that runs to 2026.

The current rent roll of just over €7 million equates to a rent of €441 per sq m (€41 per sq ft). The first rent review last year passed without any change because of the collapse of the property market.

The next upward only reviews fall due in 2016 and 2021.

Four other blocks and a 3.75 acre site at the front of AIB Bankcentre were also bought in 2006, by Seán Dunne’s Mountbrook Homes for around €200 million.

The remaining office facilities at bankcentre were offloaded in 2005 for a massive €367.75 million.

The newly built complex was bought by a group known as the Serpentine consortium, a syndicate of private individuals and companies assembled by AIB private banking and Goodbody Stockbrokers.