A fund backed by Irish property group Castleway Developments has acquired two large office blocks in the UK for a combined €63 million.

The Orion Fund, which is managed by Castleway and Liberty Asset Management, has purchased offices in the City of London and Edinburgh and plans to spend about £10 million extending and refurbishing them.

These are the first deals concluded by the fund since it closed to investors here in July, having raised €73 million in equity.

In London, the fund has paid €43 million to acquire Roman House, a 55,100 sq ft office block. It plans to extend the property to 70,000 sq ft to maximise its returns from the building.

In Edinburgh, it paid €20 million for Helix House, an office development just over a mile from the city's business district.

Castleway plans to more than double the size of Helix House to about 109,000 sq ft in a move which it estimates will boost its value to about €60 million. Both deals are leveraged by debt.

The property developer has predicted that both investments will achieve a 20 per cent internal rate of return for investors over the next five years.

Jim Osborne, Castleway's managing director, said that the London property would rent for about £45 per sq ft while the Edinburgh office would earn £20 per sq ft. "These are affordable rents . . . at the lower end of their markets, and we believe there'll be strong interest in them."

The Orion Fund plans to invest in property in Britain and the North and has an investment horizon of five to seven years.

Mr Osborne said that the recent global credit crunch meant that we were "in very dangerous times" at present. "There's going to be a price correction [in the property market] in the coming months . . . We're [the fund] going to sit on the fence for the moment before doing more deals," he added.

Earlier this year, Castleway paid $33 million for the Philadelphia Airport Business Complex. It also owns the Orion Business Complex in Blanchardstown, Co Dublin.