First Active is close to agreement on the sale and leaseback of its branch office at the bottom of Grafton Street, Dublin 2. The country's largest pension fund, the Irish Pension Fund Property Unit Trust (IPFPUT), is to pay slightly over £8.5 million (€10.79m) for the five-storey building at the junction of Grafton Street and Suffolk Street in a deal which will give it a net yield of around 4 per cent.

Only six months ago, First Active also sold its headquarters building, Sheehan House in Booterstown, for £16 million (€20.32m). The headquarters staff are due to move shortly to Central Park, a large office development currently under construction at Leopardstown Road in south county Dublin.

First Active will obviously use some of the cash to fit out its new offices, which will accommodate a staff of 400. Since last October it has also been buying back its own shares to create a floor price for retail investors and as a signal to the market that it believes they are undervalued. The share price on Monday stood at €2.50, well off the October 1998 flotation price of €2.86. The firm has had a difficult year or so, which included several resignations at senior management level, rationalisation and failed merger negotiations with Anglo Irish Bank. First Active will be paying a rent of £360,000 (€457,106) for the Grafton Street premises under a new 25-year lease which will provide for the standard five-yearly rent reviews. The bank has the use of around 1,300 sq ft on the ground floor, while another 1,100 sq ft on Suffolk Street is sublet to the men's outfitters, Gibson and Price. A further 8,500 sq ft of office space in the four upper floors is occupied by First Active.

The Zone A rent for banking facilities will work out at close to £250 (€317) per sq ft - a figure in line with the general level of rents on the street. However, Zone A rents on Grafton Street are set to rise to at least £275 (€349) per sq ft.

First Active's decision to retain a presence on Grafton Street is at variance with the view taken by the larger EBS Building Society, which closed its office on the street last autumn simply because it no longer made economic sense to retain a high cost premises there. Grafton Street is now dominated by fashion, particularly chain stores. The First Active block will be the second to change hands on Grafton Street this year. In February, Irish Life bought the BT2 shop from British Land for £17 million (€21.59m) in a deal that will give it an initial yield of 3 per cent.