Bank of Ireland purchases landmark property in Brussels for Private Clients

Bank of Ireland Private Banking today (Monday 9 August 2004) announced that it has acquired a landmark property in central Brussels, the IT Tower, for approximately Eur70 million on behalf of a number of clients.

The IT Tower is located on the prestigious Avenue Louise, a major thoroughfare in Brussels. The property was originally constructed in the 1970's and has recently been refurbished by the vendor, International Real Estate plc, to a high standard. The tower comprises 22,927 m2 over 23 floors and is multi-let to 22 tenants, including McKinsey and Co, Volkswagen, Banca di Roma and Banque de Rothschild.

Commenting on the acquisition, Peter Collins, Director of Bank of Ireland Private Banking said, "We believe that the Brussels office market represents an excellent opportunity for Irish investors to diversify their property portfolio in a Euro dominated market. The office market in Brussels is underpinned by the presence of public sector occupiers such as the EU, NATO and the Belgian Government and this is reflected in the fact that there has been good rental growth in Brussels in recent years in contrast to most major European cities. This rental growth is expected to continue as the general occupier market recovers and the EU expands its office requirements".

"Brussels represents good value for money for office occupiers, currently prime rents in Brussels stand at Eur300 per m2 whilst prime office rents in Dublin city centre are in the region of Eur485 per m2. The overall office vacancy rate in Brussels is currently 10.4% compared to 16.9% in Dublin. In addition, rental growth forecasts show that the Brussels office market should continue to grow at a rate of 4.5% per annum for the next four years. Forecasts for the Dublin office are not so good, with rental growth not predicted until late 2005/early 2006. In addition, prime office yields in Brussels are currently 6.25%, significantly more attractive than Dublin where prime yields are in the region of 5.00% - 5.50%", he added.

Peter Collins went on to say "While a lot of attention is being paid to property opportunities in Central Europe, we believe that established markets like Brussels which are very transparent, have competitive rental levels and high degrees of liquidity, represent better opportunities for investors looking for good returns in a relatively low risk environment. This is our third European transaction over the last two years and we expect to see the trend towards European property by Irish investors continue".

Brussels has become a very liquid investment market with over Eur1.6 billion invested in commercial property in 2003. German open-ended funds and Belgian Sicafi's (Real Estate Investment Trusts) continue to dominate over 60% of the market. However, the increase in investment levels from private investors has been exceptional. Irish and Middle Eastern private investors have been the main contributors. In contrast in 2003, the overall commercial property investment turnover for the whole of Ireland was marginally in excess of Eur650 million.

CB Richard Ellis Gunne with CB Richard Ellis Brussels advised on the acquisition. Caroline McCarthy of CBREG commented: "This deal represents the largest transaction by Irish investors in Brussels to date and demonstrates Irish investors' requirement for diversification into mainland European markets within their personal property portfolio".

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Contact:
Kevin Quinn
Associate Director
Bank of Ireland Private Banking
Ph. 01 637 8694

Anne Mathews
Media Relations Manager
Group Corporate Communications
Ph. 01 604 3836
Mob. 087 246 0358