Saturday 23 September 2017

AIB branch for €3m could be better bet than shares

A three-storey building in Naas, Co. Kildare, currently let to AIB is guiding €3m
A three-storey building in Naas, Co. Kildare, currently let to AIB is guiding €3m
14 units are being offered for sale at Cashel Business Centre in Crumlin, Dublin 12
Ronald Quinlan

Ronald Quinlan

Private investors eyeing the upcoming stock market flotation of AIB could find there is a better opportunity to be had from the State-owned bank by securing it as a tenant instead.

An attractive income yield of 7.97pc is in prospect for the purchaser of a three-storey building on Main Street, Naas, Co. Kildare, which is let in its entirety to Allied Irish Bank Plc on a 20-year FRI (full repairing and insuring) lease from October 2009.

The property, which is being offered for sale by agents Savills for a guide price of €3m, delivers a current passing rent of €250,000 per annum and is subject to five-yearly upward-only rent reviews. There is approximately 7.6 years remaining to a break option, or 12.6 years to lease expiry.

The property occupies a high-profile position on Main Street, the principal retail and commercial thoroughfare in Naas. The area benefits from significant footfall as the building is situated adjacent to the town's courthouse and in close proximity to other financial occupiers including Bank of Ireland and Ulster Bank.

The property itself comprises an attractive three-storey building extending to approximately 693 sq m (7,460 sq ft). The building benefits from prominent frontage of 19 metres onto Main Street and occupies a significant site extending to 0.13 hectares (0.33 acres).

The ground floor is laid out with an open-plan retail banking hall and cellular offices while the upper floors consist of office and ancillary accommodation. There are 25 surface car-parking spaces to the rear of the property.

Commenting on the opportunity presented by the sale, Paul Callanan of Savills said: "This property will appeal to a wide range of private investors and funds due to the quality of covenant, location and income returns relative to deposit rates and government bond yields".

The property's guide price of €3m equates to an income yield of 7.97pc after standard purchasers' costs of 4.46pc are deducted. As the building is being disposed of as an investment sale, the tenant is not affected.

Elsewhere this week, Savills is offering 14 units at Cashel Business Centre, on Cashel Road, Crumlin, Dublin 12, for sale by private treaty at a guide price of €2.75m. Cashel Business Centre comprises a modern, three-storey office building that has been constructed in two interconnecting blocks. The sale includes 14 units within Cashel Business Centre totalling approximately 2,637 sq m (28,384 sq ft) with units ranging in size from 71 sq m (764 sq ft) up to 474 sq m (5,100 sq ft).

Six of the 14 units are currently vacant and the current rent roll is approximately €287,000 per annum. With 1,284 sq m (13,820 sq ft) currently vacant, there is potential to add another €150,000 per annum by attracting new tenants.

Based on the current income, the €2.75m guide price reflects a net initial yield of 10pc with the potential to improve the yield profile through additional lettings. The portfolio has a weighted average unexpired lease term (WAULT) of 3.01 years with the line-up of tenants including DNM Technology, Enable Ireland, Three Mobile and Irish Broadband, amongst others. None of the units' tenants is affected by the sale.

Cashel Business Centre is located off Stannaway Road in Crumlin. The location offers ready access to junction 9 (Naas Road) on the M50 and to Dublin city centre, both of which are within 5km.

Also in Dublin, Savills has put the former Johnson Brothers' facility at Ballymount Avenue, Ballymount, Dublin 12, on the market to let at €1.2m per annum (exclusive). The property enjoys extensive frontage onto both Ballymount Avenue and Greenhills Road and benefits from ready access to junction 10 (Ballymount) on the M50. The property comprises a detached high-bay logistics facility of approx. 13,484 sq m (145,100 sq ft) including approximately 2,533 sq m (27,264 sq ft) of office accommodation. Situated on a self-contained site of 2.96 hectares, the warehouse has a clear internal height of nine metres and there is racking in-situ. Other occupiers in the area include TV3, Fashion City, Honda Distributors and U Store It.

The property has excellent loading facilities comprising 21 docks and five ground-level roller shutter doors.

There is ample yard space for circulation and truck parking and the site is fully enclosed by palisade and post-and-wire fencing with four access points.

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