Tallaght bank on upward-only rent on the market for €4.5m

Agents Hooke & MacDonald are expecting an exceptional level of interest in what it describes as "a gilt-edged commercial investment" in the centre of Tallaght, Dublin 24, involving a Bank of Ireland branch with fixed rent increases set for the next 18 years.

Enda Moore of the agency is guiding €4.5 million for the investment, which will show an immediate yield of 7.59 per cent on the existing rent, rising to 8.7 per cent at the next review in 2017 and ultimately to more than 11.5 per cent by the last rent review.

The investment relates to Bank of Ireland’s main branch in Tallaght, which is located in the mixed use Priorsgate development at the junction of Main Street and Greenhills Road.

The banking hall and offices extend to some 760 sq m (8,180sq ft) and the bank also has the use of 12 car parking spaces at basement level.

2007 development

Priorsgate was developed in 2007 by P Elliott & Co and includes 198 apartments on the upper floors with commercial units on the ground floor including

Spar

and

Unicare

Pharmacy, along with Bank of Ireland.

Just over 100 of the Priorsgate apartments were recently bought by the Canadian property investment fund Ires REIT.

The bank is currently paying a rent of €357,000 per annum and the lease provides for minimum fixed rental increases of 15 per cent every five years under which the rental income will rise by more than 52 per cent over the remainder of the lease term.

The next review is in October 2017 when the rent will rise to €410,550; in 2022 it rises to €472,132 and in 2027 it goes to €542,952.

It is a full repairing and insuring lease without any break options.

Moore says the property presents a “truly rare opportunity” for investors to purchase a high-quality investment for the next 18 years let to one of Ireland’s leading banks with fixed rent increases for the duration of the lease.