An overseas fund has picked up an office investment in Dublin at a yield of 11.2 per cent – by far the highest return offered in over a decade for a top grade asset.

Michele Jackson of DTZ Sherry FitzGerald has agreed sale terms at marginally over €14 million for a two-storey office block let to an international company at Citywest Business Campus in Dublin 24. The original asking price had been €15.5 million.

The offices are let to SAP Ireland, part of the German software giant, on a 25-year lease from 2001 at an annual rent of €1.64 million. The building is owned by developer Davy Hickey Properties which has managed to attract about 120 companies to Citywest over the past 15 years. The 11.2 per cent yield after costs on the SAP office block is a long way from the 6.5 per cent returns offered to Citywest investors in a number of pre-funding deals during the peak.

SAP has expanded rapidly at Citywest and rents 6,968sq m (75,000sq ft) of offices and 230 car-parking spaces on a lease which gives the tenant a break option in 2021.There is also provision for five yearly upwards-only rent reviews but with the rent currently at €204 per sq m (€19 per sq ft) and €850 for each of the parking spaces, it is only fractionally above the going rate in the park.

The fund buying the investment has every reason to be happy with the covenant. SAP is the largest supplier of business software in Europe and the third largest in the world. It had overall profits of more than €3.4 billion in 2011. The company employs 1,200 staff at its three office locations in Ireland and is planning to invest €110 million in two IDA-backed projects in Dublin and Galway which is expected to create a further 250 jobs at Citywest and 100 in a cloud computing support centre in Galway.