Investments:Three office blocks in Dublin 2 - all with potential for redevelopment - have been bought by private investors for just over their combined guide prices, writes Jack Fagan

Davy Stockbrokers has paid just short of €50 million for three Dublin 2 office investments on behalf of a group of clients.

The deal will show an initial yield of 3.6 per cent but all three buildings owned by Royal Life Assurance have redevelopment potential, according to Lisa McInerney of DTZ Sherry FitzGerald.

The agency had been quoting €46.7 million for the portfolio which attracted about half a dozen bidders. McInerney said the result "should help instill confidence in the market".

There is an increasing tendency in Dublin 2 to replace some of the smaller office blocks with larger high quality buildings.

DTZ had been guiding €16.5 million for Garryard House, an office building of 1,476sq m (15,890sq ft) at Earlsfort Terrace. It is let to Equant Network Services International on a 35-year lease from the end of 1976.

The passing rent of €628,520 is under review. The block stands on a site of 0.07 of a hectare.

DTZ also quoted €22.2 million for 96-102 Lower Mount Street which is let to Irish Life Assurance on a 35-year lease from the end of 1982. The rent of €918,000 is due to be reviewed next December.

The building extends to 2,501.86sq m (27,000sq ft) and stands on a site area of 0.069 of a hectare. Based on the guide price, the net initial yield in this case would have been around 3.71 per cent but, once the review kicks in, the return should move to almost 4 per cent.

The smallest lot size with a guide price of €8 million was 13 Pembroke Row which is let to Bord Fáilte Ireland at €340,000. The 35-year lease runs from 1982. The block extends to 869.75sq m (almost 9,500sq ft) and stands on a site of 0.067 of a hectare.