Green pays about £60m for offices occupied by Microsoft

Green Property Company has acquired Microsoft's entire office portfolio in south Dublin for around £60 million. The sale-and-lease-back deal will produce a yield of just under 6.5 per cent. The investment was the largest and most sought after on the Irish market in recent years, with about a dozen major groups chasing it all the way. Green was short-listed with three others last week but its bid is thought to have appealed to Microsoft because of its ability to hold and manage the property portfolio. However, it is understood that Microsoft secured a higher offer for the offices but opted for Green because of its good reputation in the international investment market.

Roderick Downer of Colliers Jackson-Stops, who handled the sale, said yesterday he was not in a position to comment. Also tipped from the start was a consortium of Irish Life and the US-based Teachers Insurance Annuity Association. Last February, the teachers pulled off a similar deal with British Land's BL Universal, when it bought Microsoft's UK headquarters at Thames Valley Park in Reading for about £100 million sterling.

The two others short-listed were Dunloe Ewart and another consortium formed by the Irish Pension Fund Property Unit Trust and several private investors. Another interesting player showing its first interest in an Irish portfolio was one of the large German pension funds which has been busy buying in London and Paris over the past few years. The fund seldom buys lots valued below £50 million and in the case of Microsoft, the investment met that criteria, as well as any considerations about the quality of the covenant. Microsoft is the most important player in the worldwide computer industry.

The strong price paid by Green suggests the company took the view that even if Microsoft is to opt out of any of its leases, the properties would be more valuable because of their high-profile locations. Most of the big US companies setting up European bases insist on having break options in leases.

The largest building bought by Green is a 90,000 sq ft European operations centre in the South County Dublin Business Park, near Leopardstown racecourse.