Allied Irish Banks plc has announced the sale of its Ballsbridge bankcentre property in a lease-back deal for €377.7 million in cash.
The property will be sold in two lots, to Hibernian Life and Pensions Limited and to property developer Sean Dunne. The group is expected to make €230 million after taxes from the transaction.
The property will be leased back to the bank on a 20-year lease.
The announcement of the sale, which was completed following an open market tender process, was made this morning.
The existing Bankcentre comprises of eight adjoining office blocks. The front four Blocks and adjoining land are to be bought by Seán Dunne.
Either party will have the option of exercising a break clause after four years and eleven months.
The remaining property, which is being purchased by Hibernian Life and Pensions Limited, will also be leased back to the AIB Group for a period of 20 years.
The initial annual rent payable on both lots by the tenant will be €11.6 million per annum and will be subject to adjustment in subsequent five year rent reviews.
Allied Irish Bank believes the rental cost will be offset by savings and by the benefits derived from the use of the capital.
The group is expected to make €230 million after taxes from the transaction and says it will reinvest the capital from the transactions in its core banking business.
Both sales are expected to be completed during the second quarter of 2006.
