Hotel group plans €500m portfolio expansion

The Dalata Hotel Group could spend up to €500m on expanding its portfolio over the next two-to-three years, management said yesterday.

The company — which voiced its intention to acquire up to another 25 hotels, after raising €265m in an IPO earlier this year — also announced the purchase of the Tower Hotel in Derry, for nearly £4.4m (€5.5m) as part of this expansion plan.

The Tower — along with the recently acquired Pearse Street and Parnell Square hotels in Dublin, will trade under Dalata’s Maldron Hotels brand. The initial purchase yield on the Derry hotel of 9% is expected to rise to around 13% by the third year of Dalata’s ownership. That deal is set to conclude in early October.