Property investment company Hibernia REIT has exchanged contracts to acquire Cumberland House, near Fenian Street in Dublin 2, from Morretino for €49 million.

As part of the transaction the €38m short-term secured loan provided by Hibernia to Morretino in August 2014 is being repaid along with about €1million of accrued interest.

Cumberland House is a prominent seven storey office building of approximately 112,000 sq ft. with parking spaces for 213 cars, which was constructed in the late 1970s. The building is on a 1.6 acre site in a central Dublin 2 location, close to Merrion Square, Government Buildings, Trinity College and Pearse Street railway station.

The building , which was previously owned by Westmeath developer Christopher Bennett, is largely vacant and Hibernia is in discussions with a number of prospective tenants regarding potential short term lettings. The price paid equates to a capital value of €360 per sq. ft. for the existing office space.

Hibernia said the property has significant redevelopment potential with existing planning permission to replace the current building with up to 250,000 net sq ft of new office accommodation.

This acquisition is Hibernia’s fifteenth since listing in December 2013: following its completion Hibernia will have invested €517million, with a further €43million committed.

Hibernia had been in exclusive talks to buy the building last year. Talks broke down however, when an agreement couldn’t be reached on the price and the property was subsequently put on the open market for €50 million.

"We are delighted to have agreed this transaction, which was facilitated by our ability to provide a short-term loan secured on the property to the vendor in August 2014. Cumberland House is an important addition to our central Dublin office portfolio with exciting asset management and redevelopment opportunities and we look forward to working with potential occupiers on plans for it," said Kevin Nowlan, chief executive with Hibernia REIT.

In a note to investors, Goodbody described the deal as a “very attractive acquisition” in the context of deals quoted recently for Grade A prime buildings in the capital.