Bank of Ireland Private Banking continues its property acquisition strategy with purchase of Cartier Headquarters in Paris for €285m.

Bank of Ireland Private Banking today (18 October 2005) announced that it has agreed to buy the Cité du Retiro building in Paris for €285 million (gross cost). Currently let to Cartier International, the global luxury goods company, Cité du Retiro is situated in the heart of Paris's Central Business District.

The property comprises 21,000 sq m of office space in four interlinked buildings. Cité du Retiro was completely rebuilt in 2000 - 2002 to a very high specification. It is one of the few buildings in Paris offering both large size and modern efficient floor plates within the 8th Arrondissement, which is the traditional home for a significant number of international companies, banks and service providers. The building is almost entirely let to Cartier.

According to Peter Collins, Director, Bank of Ireland Private Banking: "We issued a report in the summer which cautioned against some of the exuberance in certain property markets. In the report, we outlined that the focus of our property acquisition strategy was towards the main continental markets and on quality blue-chip assets suitable as long-term acquisitions for family wealth.

"Indicating that we were less likely to purchase in the UK, we pointed out that we were pursuing deals in the principal Western European markets, notably France and Belgium and in Scandinavia. Underpinning this strategy is the fact that yields for commercial property in the UK and Ireland have become more demanding and some of the major European markets now offer investors better value.

"Our current advice to clients looking to add to their property portfolios has been to favour European locations such as Paris over the traditional UK markets. We believe Paris offers an excellent opportunity. At the moment vacancy rates in Paris's Central Business District is 5.4%, with very little development pipeline for quality buildings such as Cité du Retiro. Leasing activity is also picking up. As a result we are confident of good rental growth over the next few years in the market".

"We are delighted to have secured this opportunity in an "off market" transaction. Cité du Retiro is a truly unique property and will prove an excellent long term investment for our clients", added Peter Collins.

The transaction is expected to complete in December.

Disposals in UK deliver significant returns to investors

In line with this strategy Private Banking has been more active in disposals in the UK, having sold 2 of its UK property portfolio.

"Our recent disposals include a significant London office building in Midtown (Plough Place), which delivered in excess of 50% to investors after a 4 year hold and commercial/retail building in Princes's Street, Edinburgh which delivered over 50% after just 2 years. Both deals were closed out on foot of very significant demand and delivered in excess of market expectations.

"We were particularly pleased with our recent UK disposals given the level of returns achieved for our clients. Initially we had expected to hold these properties for significantly longer. However, with the level of demand in the UK at present we felt that this was the right time to sell these particular properties. We continue to search for deals in the UK market, however we are finding that pricing has become much more demanding and it is simply more difficult to justify value for money for our clients", commented Peter Collins.

For further information please contact

Kevin Quinn on (01) 637 8694 or 087 2833 240 or
Anne Mathews on (01) 604 3836 or 087 246 0358