Today in the press

Wednesday 06 February 2013 10.10
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

TWO GRAFTON STREET SHOPS SELL FOR 65% BELOW 2007 PRICE - The German fund manager GLL Real Estate has bought two shops on Dublin's Grafton Street for a fraction of the price they made in 2007. The fund will pay just over €40 million for the River Island store and the adjoining Wallis outlet - a long way from the €115 million paid for the investment by Dublin property developer David Daly in 2007, writes the Irish Times. The two buildings have fallen in value by 65% since the property market collapsed. The latest off-market sale means the German fund is now one of the largest property owners on the city's premier shopping street. Three years ago it bought the adjoining AIB branch for almost €28 million in a sale and leaseback deal that is showing a return of 6%. The River Island/Wallis portfolio will show a yield of about 6.85%. Mr Daly also bought the two shops in an off-market deal from Arnotts Ltd and Arnotts Pension Fund just before the the reversal in the fortunes of the property market. The new German owners of the two shops have not given a breakdown of the current value of the two shops. When they were last sold, the Wallis building made €30 million and River Island had a price tag of €85 million. River Island is currently paying a rent of €2,152,500 for its store, which is regarded as one of the best on the street because of its larger-than-usual floorplates.

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HEAD OF AVIVA'S IRISH ARM STEPS ASIDE- The head of Aviva's Irish operations has stepped aside from his position, it emerged yesterday. The insurance giant is currently recruiting for a replacement for chief executive Sean Egan. Mr Egan is believed to have made the decision for health reasons and the chief executive's decision to step aside was communicated to staff last week, says the Irish Independent. Speaking to the newspapert, a company spokesman emphasised that Mr Egan had not left the company but was expected to be out of the office for some time. The company has begun recruiting for a chief executive with a view to filling the position by the end of next month. It is believed both internal and external candidates will be assessed. "Sean has stepped aside but it is business as usual for Aviva Ireland. The various business units are carrying out their duties as normal and there will be no disruption to the functions carried out here by the company," the spokesman said. Even though it will be business as usual for the company, the loss of Mr Egan has been a major blow to morale on the ground at Aviva.

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BEST PENSION SCHEME FUTURE MAY LIE WITH AUTO-ENROLEMENT - An auto-enrolment pension scheme for all employees may be the most effective way of ensuring that there are adequate provisions in place for low and middle income workers upon retirement, according to a comprehensive report commissioned by the Department of Social Welfare and Protection. The Irish Examiner says that the contents and recommendations of the report will be reviewed today by the Oireachtas Joint Committee on Education and Social Protection. “The main aim of automatically enrolling people into a pension scheme is that it increases occupational pension coverage and overcomes the problem of inertia. “An auto-enrolment scheme would be designed to provide an adequate income in retirement [when combined with the State pension] aimed primarily at low and middle income earners. As was detailed within the report, international experience has shown that this type of scheme is extremely successful in providing a simplified and lower cost charging structure and a consistent application across employers.” The report found a low level of transparency in terms of charges and fees and a low level of consistency between different pension products.

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BRICS BUILDER O'NEILL LEAVES GOLDMAN SACHS - Jim O’Neill, chairman of Goldman Sachs’ struggling asset management arm, is to retire from the investment bank where he became famous for forecasting the growing power of emerging market economies, says the Financial Times. In 2001 Mr O’Neill coined the acronym Brics to represent the potential of Brazil, Russia, India and China while head of economic research for the bank, and his own rise mirrored that of the countries he championed. However, people familiar with Mr O’Neill’s decision said that his departure may have been motivated in part by frustrations over the status of Goldman Sachs Asset Management within the bank. A member of Goldman’s influential European management committee from 2006, the post of GSAM chairman was created specifically for Mr O’Neill in September 2010. He was charged with expanding the business and rebuilding its flagging reputation on Wall Street, and had “strong ideas” about what should be done to revive the business, according to a person familiar with the group. Those ideas included expanding the unit’s equities offering and introducing a new incentive structure which Mr O’Neill believed would have better aligned GSAM advisers’ pay with the interests of their clients, the person said. Neither initiative came to fruition.