Mobile phone retailer O2 has opted to take a hit on its Grafton Street shop in Dublin by subletting it at a considerable loss.

The company is paying a rent of €380,000 for No 50 Grafton Street under a lease which has more than 10 years to run. The next upwards- only rent review is due at the end of next December.

John Garvey of Lisney has now been invited to sublet the premises on a 10-year lease at an initial rent of €175,000 – a 54 per cent reduction on the full rent paid by O2. The building has an overall floor area of 142sq m (1,528 sq ft) including 56sq m (602 sq ft) at street level.

The investment was bought last year for close to €4.5 million by investor Joe Leyden who has acquired a number of properties since the market took a dive.