Four groups short-listed to buy £55m Microsoft portfolio

Four groups have been short-listed to buy Microsoft's entire office portfolio in south Dublin which has been brought on to the market in a sale-and-lease-back deal likely to yield around £55 million in cash for the US computer company.

The purchaser is likely to be identified later this week and, according to property sources, it will be one of four groups: Green Property Company; a consortium of Irish Life and the Teachers Insurance Annuity Association of the US; Dunloe Ewart and another group led by the Irish Pension Fund Property Unit Trust.

Irish Life's decision to join forces with the US union to acquire the portfolio will take the market by surprise because it is thought to be the first time the union has attempted to buy an Irish property investment. However, the union and BL Universal paid £100 million sterling recently for Microsoft's buildings in the Thames Valley.

The Dublin investment is one of the largest to have come on the market in the past decade. About 12 groups tendered for some or all of the four buildings but it is virtually certain that Microsoft will do a single deal with a major player. It is understood that several consortiums of Irish investors bid for different combinations of buildings despite the break options in the Microsoft leases. Agents advising some of the interested parties acknowledge that noone is questioning whether Microsoft will opt out of any of the leases. If it pulled out, there is a broad view that some of the properties would be more valuable empty because of their superb location.

When the disposal was first announced, Roderick Downer of agents Colliers Jackson-Stops said it was a normal arrangement for US companies to have break options in foreign leases.

The largest building in the sale is the 90,000 sq ft European operations centre in the South County Dublin Business Park, near Leopardstown Racecourse. The three-year-old building, which is worth around £21 million, stands on a site of about six acres with 280 car-parking spaces.

The other three with 225,000 sq ft form an integrated complex on a 12-acre campus at Sandyford Industrial Estate. They have been valued at over £30 million by Microsoft. There are 900 car-parking spaces on site.