Dublin hotel deals top European pile

The resurgent economy and continuing weakness of the euro have helped Dublin’s hotel sector to the top of the pile in terms of activity and room revenues.

The capital recorded the fastest increase in hotel transactions and revenue per room of seven major European cities analysed by property experts, Savills last year.

Investors had a bumper year in the Irish market in 2014 with the value of transactions almost doubling on the previous year.

The trend is one that is expected to continue in the coming 12 months, according to Savills director of hotels,Tom Barrett.

“Ireland’s hotel market has benefitted significantly from an increasing number of overseas visitors — particularly from the US and

UK.

With the euro continuing to weaken against the dollar and the pound, this is a trend that is likely to continue. Therefore we expect

demand from hotel investors — both at home and abroad — to remain strong in 2015,” said Mr Barrett.

The European cities report points to a major increase in hotel transaction volumes across European cities last year with totals rising by up to 94% in Dublin to €234m and 39% in Berlin to €411m.

This growth i s being partly driven by a lack of available investment

opportunities in the larger European capitals such as London and Paris.

Despite market constraints and given the sheer scale of those two markets, the English and French cities still accounted for €2.3bn

and €1.3bn worth of transactions completed.

A number of Ireland’s best-known hotels changed hands during the year

including: The Shelbourne, Doonbeg Golf Resort and Portmarnock Hotel which were all bought by US investors.

The five-star Shelbourne Hotel was the largest deal completed with US investment firm Kennedy Wilson paying €111m to acquire the prestigious Dublin landmark.

The four-star Radisson Blu Hotel in Little Island, Cork also charted in the top 10 deals of 2014 as did Kilkenny’s Mount Juliet which sold

for €15m. However, Savills, expects north American private equity investors to increasingly focus attention on the southern Mediterranean as they look for value away from the core markets.

Dublin also topped the revenue per available room growth table with overseas and domestic demand contributing heavily.

The room criterion is a key sector performance metric which is calculated by dividing hotel room revenue by the number of rooms, rose

11.3% in Dublin.

The next biggest increase was seen in Madrid with growth of more than 10%.