Portfolio of 17 banks for sale at €28.5 million
The Layden Group is to embark on a major revamp of its commercial property holdings by selling 17 Bank of Ireland branches in the Dublin suburbs and provinces.
Joint agents Murphy Mulhall and Cushman & Wakefield are guiding €28.5 million for the portfolio, which will show a blended net yield of 7.4 per cent - considerably more than was offered in recent sales of individual bank branches.
Layden's revised investment strategy was prompted by a desire to replace most of its "dry" investments such as the bank branches with commercial properties that have further development potential. Just months before the property crash in 2007, Layden purchased 29 bank branches for €75 million. It subsequently sold off 12 of them.
The 17 buildings going for sale produce a combined rental income of €2.29 million, with all but two of the leases (Whitehall in the north Dublin suburbs and 94 O'Connell Street in Limerick) providing for upwards-only reviews on 25-year leases until 2032.
The Whitehall building will be offered for letting shortly, and the Limerick premises are being fitted out for use by New Ireland Assurance Company, part of the Bank of Ireland group. Though there is a clear preference by the selling agents to offload the portfolio in a single lot just as it was purchased, they are willing to divide it into several lots to facilitate early sales.
With all the leases except Whitehall and Limerick having more than 14 years to run, the agents expect strong interest from Irish and overseas pension and investment funds because of the bank's excellent reputation and the attractive lot sizes.
The highest-value Bank of Ireland branch going for sale is located in Mallow, Co Cork, where the investment is valued at €3,220,274, the rent is fixed at €270,685, and the net yield at 8 per cent. The next-highest value of €2,490,331 relates to the branch in Ballina, Co Mayo, where the rent of €216,080 also provides an 8 per cent return.
The selling agents have put a valuation of €2,142,017 on the Ballyfermot branch in north Dublin, where the rent of €145,2002 is expected to show a yield of 6.25 per cent. The Loughrea branch in Co Galway has a slightly lower valuation of €2,083,450, and here again the rent of €169,479 will show a net return of 7.75 per cent.
At the lowest end of the value scale, the Bank of Ireland branch in Edenderry, Co Offaly has an asking price of €754,466; with the rent already fixed at €61,372, the net yield will work out at 7.5 per cent. The bank branch in Athy, Co Kildare is also on offer at less than €1 million - €915,902 to be be precise, with a rent roll of €79,471 and a net return of 8 per cent.
The other branches going for sale are in Ardee, Co Louth (€1.395 million); Arklow, Co Wicklow (€1.762 million); Raheny (€1.444 million) and Skerries (€1.087 million), Co Dublin; Fermoy, Co Cork (€1.231 million); Longford (€1.642 million); Roscommon (€1.646 million); Enniscorthy, Co Wexford (€1.525 million); and Roscrea, Co Tipperary (€1.236 million).
The Layden Group is headed by Joe Layden. Its directors are Layden's daughters Gwen, Siobhan and Anita and his son Jack. The company has invested more than €22 million since the crash on investment properties in the Dublin area, including Grafton Street, Clonskeagh and Ballymount. There are further plans to rebalance the portfolio in the coming months.
The company's most notable Dublin interests include George's Arcade between South Great George's Street and Drury Street, which has been eagerly sought by several funds interested in developing it as an exclusive food market.