Property fund bids for blocks at AIB centre

A MIDDLE EASTERN property fund has emerged as the top bidder for four office blocks at AIB’s headquarters in Ballsbridge, Dublin 4.

The investments, originally bought by Hibernian Life and Pensions for over €170 million at the height of the property boom in April, 2006, are understood to be on the market at a discount of around 47 per cent – putting a current value on them of about €90 million.

The transaction could set a benchmark for properties being transferred into the National Asset Management Agency (Nama).

While the Middle Eastern link with the sale was confirmed last night, a report that the bidder was acting for a Saudi Arabian sovereign fund could not be substantiated.

However, it is known that the Middle Eastern bidder has had exclusive negotiating rights on the investment for several weeks. If the deal is to proceed, formal contracts are expected to be completed in the next 10 days.

Hibernian has an annual rental income of €7.1 million from the four Ballsbridge blocks which have a combined floor space of around 13,935 sq m (150,000 sq ft). If the sale proceeds at around €90 million, it will mean that the original yield of 3.65 per cent will double to 7.3 per cent.

The next upwards-only review is due in 2011, and there are similar reviews in 2016 and 2021.

Four other blocks on the site are owned by property developer Sean Dunne, while the new extension to the Bankcentre was bought in 2005 by the Serpentine Consortium – a syndicate of individuals and companies assembled by AIB’s private banking unit and its stockbroking subsidiary Goodbody Stockbrokers. It paid €367.75 million for the investment.