Ulster Bank in sale and leaseback plan

The Ulster Bank is to embark on a sale and leaseback of its main Dublin branch on College Green in Dublin 2.

Michele Jackson of DTZ Sherry FitzGerald is to seek offers in excess of €10.75 million for the investment, which will show a net initial yield of 7.48 per cent after standard purchasing costs are taken into account.

The bank is also planning to free up capital by selling and leasing back two prominent bank branches in Belfast.

The move comes after the parent company, Royal Bank of Scotland (RBS), put more than £15 billion (€17.5 billion) into Ulster Bank to shore up its capital base after heavy losses as a result of the property collapse.

RBS is to assume responsibility for the three leases when the bank branches are sold. It will take a new 10-year lease of the Dublin building at an annual rent of €840,000.

The landmark branch dates from the 1890s and has a total floor area of 2,267sq m (45,939sq ft) over four and five levels. It features a double-height ornate gated entrance opposite the Bank of Ireland on College Green.

In Belfast DTZ McCombe Pierce will be seeking £19.4 million for the Ulster Bank branch beside the City Hall at Donegall Square East. The RBS plans to take a new 15-year lease of the building at an annual rent of £1,489,000, giving the purchaser a net return of 7.25 per cent. The modern six-storey building has a total floor area of 10,473sq m (112,730sq ft) and serves as the main retail banking branch in the city as well as the corporate headquarters in Northern Ireland.

The selling agents are quoting over £8 million for the Danesfort branch on the Stranmillis Road which will be rented back on a new 10-year lease at £783,000 per annum. This will equate to a net return of 9.25 per cent. The four-storey building has a floor area of 7,327sq m (78,873sq ft) and adjoins a multi-storey car park.