Bank of Ireland Private Banking has bought a £126.1 million (€185 million) shopping arcade in Leeds on behalf of its wealthy clients. Victoria Quarter, a listed retail arcade built in the 1900s, is a high-end development located in the main retail street of Leeds.

Bank of Ireland has acquired the property for a syndicate of customers, numbering up to 20. The deal has a 65 per cent gearing, so 35 per cent of the purchase price, or €65 million, has been drawn from clients' cash resources.

Peter Collins, director of property in Bank of Ireland Private Banking, said the deal matched exactly with the division's strategy for retail property.

He described Victoria Quarter as a "dominant scheme", meaning that it is the main development in the Leeds area for its particular type of high-end fashion retail.

Mr Collins said the more exclusive end of the retail market had largely escaped the malaise suffered by the British high street over the past couple of years.

"This end of the market is consistently trading much better than the UK retail market as a whole and there is strong demand for luxury retailers to gain a foothold in the Victoria Quarter scheme," he said.

In the past year, rents within the arcade have climbed by 12 per cent, with the buyers expecting a yield of about 4.6 per cent.

The investment in Leeds, England's fourth-largest city, comes just weeks after the private banking division sold another retail development in London.

Mr Collins said the Gallions Reach Shopping Park in London's East End had been divested after just two years because it had risen in value a lot faster than the bank had originally expected.

He said Victoria Quarter, where the bank has a seven-year investment horizon, was "a different type of investment".

The arcade has 84 outlets and is anchored by luxury department store, Harvey Nichols. It also houses tenants such as Louis Vuitton and Vivienne Westwood and spans 217,000 sq ft across three linked shopping malls. The bank will now look to maximise rental growth by examining its tenant list and redeveloping aspects of the centre.

Bank of Ireland Private Banking has stepped up its involvement in commercial property over the past few years and now manages property assets worth about €1.5 billion on behalf of its clients.

Other transactions completed of late include the purchase of aoffice property in Stockholm that is rented to global law firm Linklaters. The bank has also bought Cité du Retiro, an office property in Paris occupied by Cartier.