The headquarters of the Department of Justice in Dublin has been sold for €52.3 million which is more than €12 million above the guide price.
The six-storey building on St Stephen's Green was bought in September 2000 for €36.5 million - giving the Government a profit of €15.8 million. The building was previously rented by the Department.
The purchaser is Shelbourne Developments, a private company run by Mr Garrett Kelleher who redeveloped the former Irish Press office building on Burgh Quay.
It is understood up to a dozen developers tendered for the building, which is actually regarded as the ugliest on St Stephen's Green, and that at least two other interested parties bid in excess of €50 million.
The Minister of State for Finance, Mr Tom Parlon, who is leading the Government decentralisation project, said: "This provides a clear signal that the Government is serious about the decentralisation programme. The proceeds of the sale will form a major part of the funding for decentralisation." Since 2000, the State has saved €5.8 million in rents on the building. Selling agent Lambert Smith Hampton originally estimated that the building would sell for around €40 million.
The six-storey over-basement building replaced a row of five Georgian houses in the mid-1960s.
It was designed by the professor of architecture at UCD, Prof Desmond FitzGerald, and was nicknamed "The Lubianka" in the 1970s after the old KGB headquarters in Moscow.
The 7,782 sq m (83,765 sq ft) block will require substantial refurbishment and redevelopment before it can be relet.
However, it is believed it is more likely to be renovated as a hotel or as residential units because of its unsuitability for conversion into modern offices. It is in a prime location and has 82 car-parking spaces which is an unusually high number for the city centre.
It is planned that Department personnel will be transferred to Tipperary town and nine other locations as part of the decentralisation programme announced by the Minister for Finance last year.