Ulster Bank aims to raise £27m by selling city bases
Published 20/06/2013 | 08:20
Ulster Bank is aiming to raise at least £27.4m by selling and renting back its two Belfast premises, it has emerged.
Estate agents DTZ McCombe Pierce yesterday confirmed it had been instructed to sell the bank's city centre headquarters for an asking price of £19.4m, while the Danesfort call centre in south Belfast has a price tag of £8m.
Included in both prospective deals is a 'leaseback plan' in which Ulster Bank will remain in the city centre building for 15 years and in the Danesfort building for a decade, possibly signalling a long-term commitment by parent company Royal Bank of Scotland to Ulster Bank.
Sale and lease-back plans have become a common method for banks to raise capital over recent years.
Under-pressure Ulster Bank made a loss of of £1bn in 2012 and its performance has put pressure on tax-payer-owned RBS to sell off the Irish business.
Donegall Square East is expected to elicit a number of eager suitors, especially from institutional investors such as pension funds.
DTZ McCombe Pierce said the building was in a "prime location... adjacent to Belfast City Hall in an area which is home to numerous financial institutions and corporations including Danske Bank, Bank of Ireland, Barclays, Aviva and Davys".
The agency said quality was key to investors.
"RBS are a highly desirable covenant (tenant) and their commitment to these buildings adds to the strength of the properties as investments," it added.
Donegall Square has remained a desirable area for commercial property despite the downturn. The Scottish Mutual Building near City Hall was recently sold to the Hill family, owners of the Galgorm Manor outside Ballymena.
However, the Danesfort building could be harder to shift because of its out-of-town location.
The Donegall Square East premises was built in the late 1990s and features an elaborate portico entrance, part of the Methodist Church which used to occupy the site.
The loss made by the under-pressure Ulster Bank in 2012