Wednesday 15 August 2018

AIB to lease seven-storey offices on Molesworth St in 20-year deal

An artist’s impression of the exterior and interior of AIB’s new premises at No 10 Molesworth Street
An artist’s impression of the exterior and interior of AIB’s new premises at No 10 Molesworth Street

Ronald Quinlan Commercial Property Editor

AIB has signed a lease with Irish property-investment firm Iput for No 10 Molesworth Street, a 10,680 sq mt (115,000 sq ft) office building being developed in the heart of Dublin's central business district.

The bank, which is still largely owned by the taxpayer, will occupy the entire seven-storey building on a 20-year lease.

Iput is understood to have a agreed to a rent of €57.50 per square foot for the property.

The figure represents a moderate discount on the rate of €62.50 currently being commanded by equivalent Prime Grade A office space in the central business district.

AIB's pre-letting of No 10 Molesworth Street was formally confirmed in an announcement by Iput yesterday.

Iput's chief executive officer, Niall Gaffney, said: "The completion of this major letting to AIB means we have now fully pre-let all of our development projects, bringing our total lettings for the year to date 2017 to 400,000 sq ft, generating €16m in new rent for our shareholders in 2017."

No 10 Molesworth Street bears the distinction of being the first newly-constructed office in Ireland to achieve platinum accreditation through the LEED system of rating for sustainability. The building is due for completion in the first quarter of 2018,

No 10 Molesworth Street is the second lease to have been signed by AIB this year. In February, the bank agreed a rent of €301 per sq m (€28 per sq ft) with Green Reit for Block H at Central Park in Sandyford.

Extending to 14,083 sq m (151,586 sq ft), the eight-storey building has the capacity to accommodate 1,500 employees. AIB is set to occupy the property on a 20-year lease with the first 12 months rent-free under the terms of its agreement.

The bank's decision to enter into long leases at Central Park and on Molesworth Street represents a change of course from the past number of years, in which it had been renting a number of office premises on short-term leases.

Those lettings had been necessitated by its decision in 2006 to sell four blocks at its Bankcentre headquarters in Ballsbridge to developer Sean Dunne in a €207m sale-and-leaseback deal. The bank vacated the four Bankcentre buildings in July 2011.

While AIB's intended movement of employees to Molesworth Street was being welcomed yesterday by the bank's management and by its new landlords, Iput, the announcement came in for criticism from the Financial Services Union (FSU). In a statement, the union's senior industrial relations officer, Billy Barrett, said the FSU would be seeking a comprehensive agreement on staff relocations in AIB following a recent series of moves that have affected staff.

"While the bank hails this as the beginning of an 'exciting period', for many staff the move will result in disruption to their work-life balance," Mr Barrett said.

Irish Independent

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