Q1 hotel acquisition spend hits record €500m

More than half a billion euro was spent on hotel acquisitions in the first quarter of the year in the largest quarterly spree ever seen.

Q1 hotel acquisition spend hits record €500m

Twenty-five properties exchanged hands in the first three months of the year in 17 transactions, according to statistics published yesterday by commercial property consultants CBRE.

The total represents a huge rebound in the hotel sector from the recession, with the closing of Dalata’s €455m acquisition of the majority of the Moran Bewley’s portfolio in January (excluding the Red Cow Hotel in Dublin) contributing the bulk of the total deal value.

“Sixty-three hotel sales concluded in Ireland in 2014, totalling over €341.7m, compared to 33 hotel sales totalling €160m in 2013,” said Paul Collins, executive director of CBRE’s hotel and licensed division.

“It is phenomenal to consider that as a result of continued deleveraging efforts, the volume of Irish hotel sales concluded in the first three months of 2015 totalled more than €500m.

“We expect 2015 to be the busiest year on record for hotel transactions in Ireland.”

That expectation is driven by the number of notable hotel sales still underway, including the Crystal Collection of seven Irish hotel properties with a combined 835 rooms, which CBRE are currently selling.

The collection of hotels includes the Metropole in Cork, Limerick’s South Court Hotel, and Fels Point in Tralee.

Maryborough House Hotel financial controller Eamonn Kearney said the pace at which prices have recovered is quite incredible.

He added that the industry is picking up with the benefits being seen across the country — including at the Douglas property, which holds the title as reigning AA Hotel of the Year.

Mr Kearney warned, though, that improvements in room rates and occupancy levels will tail off and that there is still an element of caution among hoteliers.

Meanwhile, Dalata yesterday closed another deal by acquiring the three-star Maldron Hotel in Wexford for €3.53m.

Dalata has operated the hotel since August 2007 under the terms of a 33-year leasehold agreement with a current annual rent of €300,000 per annum subject to upward-only rent reviews at five-year intervals.

The acquisition will help consolidate the group’s position and allow it to develop the business of the hotel to its full potential, it said yesterday.

The transaction on the 108-bedroom property is expected to close later this month.

The hotel has recently also undergone a full refurbishment, including of its bar and restaurant, leisure centre, and four conference rooms.

Dalata chief executive Pat McCann recently outlined plans to create hundreds of jobs over the next 12 months.

The country’s largest hotel group also confirmed that it is to create a group of Clayton Hotels from its current portfolio, aimed at the corporate market.

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