The highly publicised sale of bank branches last autumn by both Bank of Ireland and Allied Irish Banks were not, contrary to general belief, the first of their kind in this country.

Bank of Scotland was first into the fray before the other two banks and today it is marketing the sale and leaseback of four further branches at Bray, Dún Laoghaire, Drogheda and Kilkenny.

Like other Bank of Scotland retail outlets, the four branches will trade as Halifax, a brand that is bound to benefit from its current aggressive marketing campaign.

Colm Luddy of CB Richard Ellis expects to secure over €8.6 million from the sale of the four branches which will be rented back by the bank on 20-year leases at a combined rent of €375,000.

There will be upwards-only rent reviews at five-year intervals and the tenant will be responsible for internal and external repairs, and the payment of insurance premiums. Although none of the four branches measure up to the style and quality of most of the bank buildings sold by Bank of Ireland or AIB, the Bank of Scotland branches are well located and have the benefit of a strong covenant.

The first three branches sold by Bank of Scotland, at Ballyfermot in Dublin and in Wexford and Kilkenny, gave investors yields of just over 3 per cent.

The Dún Laoghaire branch, along the pedestrianised part of George's Street, has a guide price of €2.68 million, according to the agent. At that value, the rent of €112,000 would show a yield of 3.75 per cent.

The selling agent is quoting €2.4 million for the Kilkenny branch which will be rented back at €107,000 per annum, showing an initial return of 4 per cent. The same yield is being suggested for the Drogheda branch which is expected to make around €1.86 million. The rent in this case will be €83,000 per annum.

The fourth branch (Bray) going for sale by private treaty has a guide price of €1.64 million, a rent of €73,000 and a projected yield of 4 per cent.

Bank of Scotland, like the other two banks, contends that the sale and leaseback of branches frees up capital that can be better used in its core businesses.

Luddy says that the strength of the covenant provided by Bank of Scotland, the prime locations of each of the branches going for sale and the excellent potential for rental growth, were likely to generate a high level of interest in the investments.