Hotel sales hit highest volume in five years
Published 17/10/2013 | 05:00
MORE than €100m worth of hotels have changed hands so far this year, and the volume of transactions is likely to be the highest for at least five years.
Research from CBRE shows that 20 transactions were completed in the first nine months of this year, compared with 24 for the whole of 2012.
Those sales topped €106m in value, with seven of the deals completed between July and September. Last year, deals for hotels topped €140m in total.
"Considering that there are several other transactions in negotiations and more hotel properties to be launched for sale over the coming weeks, the volume of hotel transactions for this year as a whole looks set to beat last year's figure of 24 Irish hotel sales concluded in 2012," CBRE says.
CBRE head of brokerage for the UK and Ireland Paul Collins said his firm "continued to see strong demand from Irish and international buyers for good hotel properties".
"There have been a number of hotels offered for sale in recent weeks which will satisfy some of this demand," he said.
"While the Government's generous capital gains tax waiver has been renewed for another year, there is still strong demand from buyers to complete deals with purchasers to have transactions completed by year-end.
"With 20 hotel sales completed in Ireland during the first nine months of this year, we are likely to see the value and volume of hotel sales concluded in 2013 exceeding last year's total," he added.
The growth in the hotels market has been driven in part by the capital gains tax waiver. Somebody who buys a commercial property and holds it for seven years will be exempt from paying tax on the appreciation of the value of the property during that time.
Launched at Budget 2012, the waiver was due to expire at the end of this year. On Tuesday, however, Finance Minister Michael Noonan extended the exemption for another 12 months in a move that has been widely welcomed by the property and construction sector.
That waiver helped boost hotel sales last year, when transaction volumes jumped to 24 from eight in 2011. That improvement has continued into this year.
By far the biggest hotel transaction so far this year has been the Trinity Capital Hotel in Dublin, which is said to have sold for about €35m to US billionaire John Malone, while the Fota Island Resort in Cork was snapped up for €20m.