Nama hotel sales to increase

NAMA is expected to pick up the pace of Irish hotel sales in the coming 18 months — so far, it has sold just 19 of the 136 in its control, and so has 117 left to sell, a conference organised by the Irish Hotel Federation heard this week.

Nama hotel sales to increase

In a stark day of number crunching for the sector which is striving to emerge from crushing debt, Aiden Murphy, partner in accountancy firm Crow Horwarth, said 240 Irish hotels were in financial difficulty, with 69 in receivership and a number would have to be sold consensually or otherwise, or refinanced.

About 12% of the country’s c 950-plus hotels are in Nama, and of the 117 left to sell by the agency, just 16 are no longer trading, according to Nama, which was represented by its hotels specialist Patrick Ryan. Fourteen of the 19 sold so far are in Dublin, where hotel business recovery has been most marked to date.

The quality breakdown of the hotels sees 9% in the five-star category, 42% are four-star, and 34% are three-star. In regional terms 31% are in Munster, 26% in Dublin city, 24% in the rest of Leinster and 20% in Connacht and Ulster.

As Nama continues to shorten the time span for its eventual wind-up, the deleveraging and sale of hotels is expected to gather pace: due in coming months the IHF conference heard are the Premier Inn in Swords, the Maldron in City West, and Waterford Castle in the autumn.

Economist Alan Ahearne said the debt in the sector had stood at €6.7billion in 2011, and this has been reduced to €5.3 bn, but a furthe €1.4bn needs to be shaved off to bring more stability to the hotel sector.

Hotel sales specialist Tom Barrett of Savills estimated that in 2012, the value of hotels sold was €150 million, with 24 hotels sold, that rose to €200m in 2013, in 33 transactions. That’s forecast to rise to €350m this year, in 40-50 sales, adds Denis O’Donoghue of Savills.

Meanwhile, hotel operators Dalata were the names on many peoples lips at the Irish Hotels Federation think-tank, focusing on ‘Recovery’ in the Irish hotel and hospitality sector, and they are expected to be strong in the bidding of a trio of good hotels offered in one c €30m portfolio for Nama, via Savills.

As reported here yesterday, they are Killarney’s 172-bed Malton Hotel, guiding €15m (the former and stately Great Southern Hotel, it previously sold for €40m), Kilkenny’s 118-bed Ormonde, at €11.5m, and Cork City’s historic 112-bed Metropole Hotel, guiding €4m, and bought as part of the Gresham group in the mid-2000s, by Precinct Investments headed by developer Brian Cullen. The Metropole in Cork, home to the Jazz Festival, is three-star, while the Kilkenny and Killarney hotels are four-star operations.

It’s understood the portfolio sale was to include four hotels, but one has been held back, and the three now on the market have 400 beds between them. All have strong brands and locations, and trade well.

Apart from the sale of Jurys hotels several years ago, it’s an unusual portofolio offer, the first such in a decade, according to Savills.

This week’s IHF conference heard Nama suggest that a number of its future hotel sales may be as part of loan sale bundles, rather than as individual entities.

Details: Savills 01-6181300, 021-4275454.

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