Thursday 23 October 2014

Hotel sales expected to beat estimates as NAMA and Ulster Bank sell off

Published 31/07/2014 | 02:30

The City Central Hotel in Limerick

Irish hotel sales this year could well exceed previous forecasts of €350m and come closer to €400m according to a report on the hotels market from agents DTZ Sherry FitzGerald. That's more than double the €187m in sales achieved in the first half of this year. Last year sales totalled about €250m.

DTZ's revised forecast is based on recent deals agreed as well as estimates of the number of properties due to come to the market before the capital gains tax waiver ends next December.

Hotels which went sale agreed in recent months include the five star Aghadoe Heights in Killarney for €6.5m; five star Heritage Golf & Spa Resort in Killenard for €5.5m; the Metro Hotel and Apartments Dublin Airport for €5.5m; Four star Charleville Park, Cork €4m; Fitzwilton Hotel, Waterford in excess of €3m and the Cavan Crystal Hotel for €2.5m.

"There is also a healthy supply of hotels in the pipeline as a result of NAMA and the banks' ongoing deleveraging," claimed Kirsty Rothwell, DTZ's head of hotel solutions.

NAMA are set to bring several prime hotels to the market throughout 2014 and into 2015, particularly in Dublin," she added.

Of the 208 hotels worldwide that have been secured on NAMA loans, 136 of them are in Ireland and about half of these are in Dublin.

It sold 19 Irish hotels to date, recovering €237m; while 101 hotels have yet to be released, representing 12pc of all Irish hotels.

NAMA recently brought three hotels to the market in the Project Venue portfolio consisting of the Malton, Killarney, the Gresham Metropole, Cork and Kilkenny Ormonde.

In addition The Savoy Hotel in Limerick city, guiding €3.75m, is for sale as part of City Central portfolio in the middle of Limerick.

Others for sale include Maldron Hotel City West, €3.75m; Dublin Citi Hotel, 46/59 Dame Street, €3m; the Central Hotel, Tralee, €1m; Tallaght Cross Hotel; Middleton Park House, Westmeath, €1m; Letterkenny Court Hotel, €900,000; the Glencarn Hotel in Castleblayney, €750,000 and the Pontoon Bridge Hotel, Mayo, guiding €550,000.

The three star George Boutique Hotel in Limerick city is believed to be under offer for significantly more than the €3m it had been guiding.

Furthermore, there have been market reports that the Premier Inn in Swords and Waterford Castle will be offered for sale shortly.

Ulster Bank is expected to offer about 10 hotels of its 40 hotels in Project Nadal in the coming weeks.

Nadal includes two Dalata operated hotels: Whites of Wexford and the Clayton in Galway city.

Foreign buyers purchased about two thirds of the market so far this year with US buyers accounting for about three quarters of these. European buyers, accounted for 15pc of the total spend. The remaining hotels were purchased by investors from South Africa, Northern Ireland, China and the Middle East. Cross border investment activity is being led by leading international players such as John Malone, Donald Trump and Kennedy Wilson.

"The number of repeat buyers in 2013 and 2014, both internationally and within Ireland, is a positive sign and one which bodes well for future interest in the Irish hotel market," Ms Rothwell said.

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