London auction house Allsop & Co has been so taken aback by the response from Irish investors to its most recent commercial sale that its next auction in May could see punters in Dublin bidding via telephone and the Internet.

In February, the company successfully tested out a system of bidding via the Internet for commercial property and is now looking to set up a temporary office in Dublin to allow investors to bid in the London sale.

The system has a display screen showing the auctioneer in action, a picture of the property and the current bid in both sterling and euros.

"The February commercial auction produced the most enthusiastic response so far from Ireland," says Jeremy Hodgson of Allsop's auction house in London's West End. "It is getting better and better and we have, probably, the biggest level of exposure to the Irish investor now, so we are considering providing a live link-up by Internet. Irish interest is very much an integral part of what we do."

More than 20 private Irish investors attended the firm's last London auction at the Mayfair Hotel in February. "One individual bid on around 40 per cent of the catalogue - and some 20 per cent of the lots in a sale, which reached £47 million sterling in total, were bought by Irish investors," Mr Hodgson said. "And I had a collection of half a dozen bidders gathered around a single phone calling from Southern Ireland." The loose consortium of bidders on the telephone ended up with a high-yielding parade of shops in Crawley, Sussex.

At the auction, Mr Hodgson noted the presence of two key types of Irish buyer.

The first is still looking for the traditional target investment, such as a high street property let to a good covenant such as Barclays, or another high profile bank with a national profile, and with over 10 years left on the lease. Although yields are between 7 per cent and 7.5 per cent, the covenant offers security.

But another, more experienced, investor is making its presence felt in the auction room. "More and more, we are seeing Irish buyers targeting properties let to local tenants, which are normally difficult to fund because of the insecure nature of such tenants," said Mr Hodgson. "They are looking for better returns and so are prepared to take a bigger risk."

He estimates that the initial yields could be as high as 20 per cent but, of course, such investments are less secure. Typically, such properties could have up to 14 years left on the lease but the tenant could run into trading difficulties.

"These are not first-time private investors but are more experienced," Mr Hodgson added. "They are also prepared to buy up to 20 properties to cover the risk, which may see a small percentage of those investments not work."

Tomorrow, Allsop will hold an auction in London and offer 128 lots, producing a current income of £5.15 million sterling in total, on behalf of vendors such as British Telecom, the London Borough of Ealing, Prudential Portfolio Managers and the Woolwich Pension Fund.

According to Mr Hodgson, several of the properties have already taken the eye of private investors from Ireland, including a bank let to the Woolwich in Walton-on-Thames, south-west of London. The guide price of "up to £425,000", would offer a net initial yield of 8.9 per cent.

Other opportunities include a multi-let parade of shops in Wallington, south of central London, producing a rent of £39,950 per annum. The net initial yield would be as high as 17 per cent, with a guide price between £225,000 and £250,000.

Office properties, such as a branch of the estate agent Strutt & Parker in Moreton-in-Marsh, are going under the hammer. This particular investment will be guided at £375,000 on an 8.35 per cent net initial yield and the lease on the Grade II listed stone building expires in 2012.

Some lots, such as a multi-let retail parade in Richmondon-Thames, which is being offered from £300,000 (initial yield of 12.25 per cent), also present a development opportunity.

Today, Jones Lang LaSalle in London will be offering a mixture of 31 lots, ranging from a post office investment in North Finchley, north London, to the headquarters of the Grosvenor Estate in Mayfair and St James, with a guide price of over £6 million.