Bank of Ireland Private Banking acquires London Office Tower for Euro158m

- total private client property

Bank of Ireland Private Banking today (Wednesday 8 December) announced that it has acquired London office tower, Windsor House and the adjoining Christchurch House for STG Pounds109m (Euro158m) on behalf of a group of private investors. This transaction follows quickly on from the Euro116m deal purchase of Gallions Reach Shopping Park in October and the Euro71m deal completed in August in Brussels both on behalf of consortia of Bank of Ireland Private Banking clients.

This latest deal comprises two self-contained buildings linked at basement level, Windsor House in Victoria, an impressive 18-storey office tower totalling 112,685 sq. ft, and Christchurch House, a retail and office property totalling 33,600 sq. ft. The main building, Windsor House, which accounts for 78% of the rental income, has recently been refurbished to a very high standard, is let to London Underground Limited on a 20 year lease with no break options. The majority of the second building, Christchurch House, is let to Lloyds TSB Bank plc by way of two separate leases, which have unexpired terms of 17 years and 21 years respectively. The remainder of the space is let to three retail users.

Commenting on the transaction, Peter Collins, Director of Bank of Ireland Private Banking said; "We believe that London city is now showing signs of recovery in the office market. The West End, in particular, is beginning to experience rental growth, specifically for Grade A space. In this respect it is the first of the major London sub-markets in which we are seeing this trend emerge. Victoria is a prime business district in the West End of London that has traditionally attracted large space users including financial institutions, multi-national corporate and Government departments."

Vacancy rates in the Victoria area are below the West End average at just over 7%. Three years ago prime headline office rents in the Victoria area were in the region of STG Pounds65.00 per sq ft. Therefore prime rental levels today at STG Pounds55.00 per sq. ft provide a very good base for future rental growth. The purchase price of STG Pounds109 million, reflects a net initial yield of 5.81%.

With three deals completed in relatively quick succession since August, totalling some Euro345m in value, we've obviously seen strong growth in demand amongst investors for property of this calibre. In this most recent deal, we saw continued interest from our clients both in terms of direct investment and, in particular, through pension-based investments" added Peter Collins.

Ends

For further information contact:

Peter Collins on (01) 637 8687
or
Kevin Quinn on (01) 637 8694 or (087) 283 3240.
or
Anne Mathews
Group Corporate Communications
(01) 604 3836, 087 246 0358