Goodbody stockbrokers is paying close to €169 million (£115 million) for one of the most prominent office developments in the City of London.

The 120,000 sq ft speculative scheme, at One Lothbury, is next to the Bank of England and has been purchased on behalf of a small number of the firm's high net worth clients.

The stockbroker outbid a number of other parties for the imposing corner building, which once housed part of the central bank's operations. The firm is planning to redevelop the building by the end of 2009. Its curved façade will be kept as part of the multi-million pound project.

According to sources close to the deal, the stockbrokers will start negotiations on a possible pre-letting of the site next year.

They predict that its prime location in the heart of the Square Mile will attract a number of blue-chip companies. Office occupancy rates in London are among the highest in the world.

However, there are conflicting views over London rental growth. As some sources have pointed out, Goodbody's acquisition is effectively a "gamble on the sector's continued strong performance". Two years ago, Barclays Capital and Welbeck Land, the joint developers on the scheme, paid a record €49 million for the site, which had yet to receive planning permission, sparking concerns from some in the industry that the market was over-heating.

Although the Goodbody deal will enable the two firms to pocket a profit, estimated by some to be in the region of €51.5 million, sources close to the firm insist the purchase price reflects that of a "completed, well-located, grade-A building".