The rock bar interior of The Elms on Belfast's University Road, which closes for good on Saturday to be replaced by a Tesco convenience store

The Republic's bad bank Nama is to sell an iconic south Belfast student pub to Tesco for £1.15m after a bidding process fetched 25% above the asking price.

The Belfast Telegraph first reported in June that Tesco was eyeing up The Elms on University Road as the location for one of its small-store format Tesco Express outlets.

Now the supermarket giant is expected to sign on the dotted line next week to snap up the premises and its off-licence, once part of the Botanic Inns empire of pubs and hotels.

A pub company had also been bidding on the Elms – a rock bar in its latter incarnation – pushing it over the £900,000 asking price.

Colin Neill, chief executive of Pubs of Ulster, said the pub had long been a fixture on the Belfast social scene.

It had been renamed the Globe by its last owners, Botanic Inns, which then decided to revert to the old name of The Elms.

Mr Neill said: "Stephen Magorrian [Botanic Inns managing director] brought the staff together and asked them what they wanted it to be.

"The staff came up with the idea of a rock bar, and he let the staff work with the designers, which was very creative and empowering for the staff."

He added: "We are now seeing the same trend as England, where Tesco has been buying up pubs and converting them into convenience stores."

The easiest way to open a small grocery store with the capacity to sell alcohol was by buying pubs with existing liquor licences, he said.

The Botanic Inns group of 13 venues went into administration earlier this year.

Five of its pubs, including The Elms, were housed in properties which had belonged to two businessmen from the Republic.

Their companies, Lisk and Lanyon, had earlier gone into administration, and Nama, set up to cleanse the Irish banking system of toxic property debt, had absorbed their bank loans.

When the Botanic Inns group went into administration, Nama renegotiated the leases on The King's Head, The Elms, The Northern Whig and the Botanic Inn and Madison's, allowing them to be taken over by the Horatio Group, led by Stephen Magorrian.

However, it's understood that the administrator of Lisk and Lanyon, Keenan CF, had instructed that The Elms be put on the market.

Nama refused to comment on the sale. Tom Keenan of Keenan CF was also unavailable, and selling agents BTW Shiells also refused to comment.

Belfast Telegraph