Contractors appointed by Nama are due to begin work this week on the amalgamation of two adjoining retail buildings on Dublin's Grafton Street with the aim of boosting the value of the outlet and attracting a leading trader to the site.

The State agency is expected to spend in excess of €1 million on the redevelopment of 57/58 Grafton Street which previously traded as Zerup and Richard Alan. The new store will have a ground floor area of 340sq m (3,660sq ft) and a further 410sq m (4,413sq ft) at first floor level.

Diane Crean of Savills says she is in negotiations with a "handful" of Irish and overseas traders to rent the new style store at €750,000 per annum.

The two buildings were part of a larger property portfolio bought during the boom by developer Bernard McNamara who had planned to create a new street from Grafton Street back to South William Street and Drury Street.

Several other landlords are also planning to amalgamate adjoining buildings on Grafton Street to attract big-name fashion traders.