AIB said yesterday that it was in discussions with a number of parties relating to a sale and leaseback of its new Bankcentre development project, the first time an Irish bank has engaged in such a transaction.
The bank, which is building a seven-storey office block on the site of its existing 1970s-built headquarters in Ballsbridge, said contracts could be signed by mid-year.
A bank spokesman confirmed that the sale and leaseback agreement would only relate to the new development and not to AIB's existing building on the site.
The bank said it expected that such a transaction would generate a capital benefit of around €100 million, which would be derived over a number of years.
It declined to comment further on how the deal might be structured and on who was involved in the talks, although the transaction is likely to appeal to various high-net-worth investors.
Despite local opposition, AIB got the go-ahead for the development from An Bord Pleanála last summer. The seven-storey office block will be bounded on one side by Merrion Road and on the other by Serpentine Avenue.
The Bankcentre, designed by RKD architects, will be in two phases, the first involving 30,466 sq m of offices in four to six storeys, an atrium and five-storey glazed gallery. The second phase will involve a four- to six-storey extension to the north of the building designed around a series of atriums.
Clearance and cabling work has begun on the site, which will include 915 car parking spaces for the bank's 4,500 staff.
A sale and leaseback arrangement involves the sale of a property by one party to a buyer who immediately leases the property back to the seller. This allows the initial buyer to make full use of the asset while not having capital tied up in the asset.
Among the companies who have engaged in this type of transaction in the Republic is Jurys Doyle Hotel Group, which recently used the arrangement in the deal it signed for the redevelopment of its Cork hotel.
Financial institutions which have entered into such arrangements overseas, where it is quite common, include Royal Bank of Scotland, Lloyds and ABN-Amro.
Meanwhile, speculation continues as to who might succeed the bank's chief executive, Mr Michael Buckley, who is expected to step down next year.
Among the names mentioned as contenders for the top post are Ulster Bank boss Mr Cormac McCarthy, Greencore chief executive Mr David Dilger and Mr Dan O'Connor, head of European consumer finance at General Electric.
