A family-owned Irish property developer and Anglo Irish Bank are set to buy a landmark building in London's financial district for €78 million.

It emerged yesterday that Alanis Ltd, controlled by brothers Mr Alan and Mr Niall McCormack, has agreed to buy the listed Royal Exchange building in London from the Rolls Royce pension fund for €78 million. Anglo is backing the deal.

The building, which dates back to 1566, is a well-known landmark in the City of London, the British capital's financial district, and gave its name to the assurance group Guardian Royal Exchange, which was based there for a time.

It houses a luxury shopping mall with more than 40 units. Tenants include a cafe bar run by design guru Mr Terence Conran, and jeweller Tiffany. They contribute to an estimated €5.5 million rent roll.

The Irish investors are understood to be interested in the property because many of the tenants are paying below the current market rent and a number of them are due reviews.

The deal, negotiated with British company ING Real Estate Investment Management on the seller's behalf, does not include offices in the building. The McCormacks are believed to be long-term investors who typically hold on to their properties.

As the building is listed, there is little or no scope for expansion. The shopping mall is housed around its courtyard.

The brothers are active investors and developers in Dublin. Recently they revamped the disused Harcourt Street hospital, which now houses, BCM Hanby Wallace.

They also developed mobile operator, O2's building on Dublin's docks and a range of other developments in that part of the city. They are involved in apartment developments in the Smithfield and Grand Canal areas.