AIB Private Banking has raised more than €17 million from its clients for a new office building in Sandyford Industrial Estate in south Dublin.

The bank's partners in the project are property developers Derek O'Leary and Reg Tuthill who are investing an additional €4.4 million in the project.

The bank is adding borrowings of €47.4 million to the €22.4 million raised to complete the building, which will cover 178,000 sq ft, roughly half the size of the new AIB Bankcentre. It will be known as The Chase building.

John Rockett, head of AIB Private Banking, said the location would be more attractive to potential tenants given the high rents charged in the city centre.

"The rental levels are about half of what they are in Dublin 2 and Dublin 4," he said. "With people getting cost conscious, that cost saving will appeal to large tenants."

There are 67 investors involved in the project, each investing at least €200,000. The building is located opposite the Microsoft building and 500 metres from the Sandyford Luas station.

According to a memorandum circulated to investors by AIB, the bank expects to earn €4.7 million in fees and interest from the project, while €3.3 million will paid in "professional fees".

The bank expects investors to be paid a return of up to 60 per cent after 30 months. Planning permission has been secured and work has already started on the building. McInerney has been hired as the main contractor on the project. Construction costs are expected to be €26 million, according to the memorandum.

After-tax profits on the first €15 million earned from the project will be split 60:40 between the investors and the developers, 40:60 on the next €5 million and 25:75 thereafter.