An unidentified Irish fund has paid €13 million for a fully-occupied office building opposite the entrance to Holles Street hospital in Dublin 2.

The sale followed several rounds of competitive bidding for Holybrook House which was brought to the market at a guide price of €12.25 million.

The investment was owned since the late 1990s by property investor Patrick Rocca who died unexpectedly at the age of 42 in January, 2009.

Brendan Delaney of Savills handled the sale for receivers Kieran Wallace and Cormac O'Connor of KPMG.

The sale will be seen as further proof of the recovery taking place within the Dublin office market.

The initial yield of 6.64 per cent equates to a capital value of €6,619 per sq m (€615 per sq ft) and confirms that investors are willing to pay a little extra for long-term secure rental income.

The block is let in its entirety to three tenants, the Open University, Pobal and the Office of Public Works with the average unexpired lease term in excess of 11 years.

Ancillary income is generated through roof masts let to 02, Meteor and Vodafone.

The Open University and the licence agreement to Meteor expire in 2015 while the remaining tenancies are in place on long-term upwards only lease agreements with no break options. The combined annual rent roll is in excess of €900,000.

The five-storey over basement office block has a floor area of 1,966sq m (21,162sq ft) and 42 car parking spaces at basement and surface level which is accessed from Denzille Lane.

Peter Flanagan of BNP Paribas Real Estate advised the purchaser who was apparently attracted by the fact that 90 per cent of the rental income comes from State bodies whose leases run for an average of 12.5 years.