A group of Irish investors has defied the credit crunch and paid €33 million for a landmark property in London.
The investors, backed by stockbroking firm NCB's private client arm, have bought Telephone House, at the junction of Temple Street and Victoria Embankment in the city's primary business district.
The group paid €33 million for the property, 35 per cent of which is their own equity, while debt accounts for the remaining 65 per cent.
The property is fully let, largely to firms of commercial solicitors, and tenants include the London office of a US law firm.
Lawyers and other professionals favour this part of London, and it is close to Temple Inn, one of the centres of the English legal profession.
Telephone House is delivering rental yields after acquisition costs of almost 6 per cent, ahead of anything of a comparable nature in Dublin.
According to Bobby Hassett, director of NCB's wealth management division, the building is due for a rent review in the next three years.
"We're going to actively manage the building," he said. "Rents are strong in the city and we think there is a bit of upside there."
Mr Hassett said that the credit crunch, part of the fallout from the crisis over US banks taking on high-risk residential mortgages, was not an issue in the market.
"In one way it's an advantage because it means that there are opportunities there that you can pick up, especially if you can move a bit faster than anyone else," he said.
He added that there were no indications of problems in the city's property market, with no forced sales or other signals of a downturn.
Mr Hassett said NCB believed the building was attractively priced.
He also said that banks were willing to back the deal, particularly on the basis that the clients involved were putting up a high proportion of the cost from their own pockets.
A large number of these deals in the past have carried as much as 85 per cent debt. "We structured it quite conservatively," Mr Hassett said.
He added that the firm was continuing to look for opportunities for clients in London, and had a strong pipeline of potential purchases.
Telephone House is a grade-two listed structure.
