Friday 30 September 2016

Dalata acquires leasehold interest in four hotels with enterprise value of €40m

Published 28/01/2016 | 07:37

Dermot Crowley, Dalata's Deputy CEO with Pat McCann, CEO
Dermot Crowley, Dalata's Deputy CEO with Pat McCann, CEO

Dalata, Ireland's largest hotel operator, has agreed leasehold interests for four four-star hotels in Dublin, Limerick, Cork, and Croydon in England for an enterprise value of €40m.

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The hotels are the Gibson Hotel Dublin, the Croydon Park Hotel in Croydon, the Clarion Hotel Cork and the Clarion Hotel Limerick.

The leasehold interest agreed comprises of operating leases with an average term of 18 years outstanding.

Speaking about the agreement deputy chief executive at Dalata's business development and finance arm, Dermot Crowley, said the move presented an exciting opportunity.

"We are very excited about the opportunity to secure the leasehold interests of these four hotels and the contract to manage Clarion Liffey Valley Hotel. This transaction gives Dalata a further 960 rooms in the cities of Dublin, Cork and Limerick.

"We will rebrand the four leasehold properties as Clayton hotels over the next year. The addition of these hotels continues the rapid growth of the Clayton brand in Ireland and the UK where on rebranding; we will have 18 Clayton hotels," Mr Crowley said.

As part of the transaction, Dalata will also take over the management of the Clarion Liffey Valley Hotel, Dublin under a short term management contract.

The Hotels in question are currently operated as part of the Choice Hotel Group.

Underlying EBITDA in the 4 hotels in for last, after adjusting for costs and revenues that will not transfer as part of the transaction, is expected to be €4.1m. Including revenues from the short term management contract, underlying EBITDA is expected to be €4.7m.

Dalata will be looking to spend €14m over the next two years to refurbish the hotels in Cork, Limerick and Croydon. Once rebranded it will being the total number of hotels in the Clayton Hotel portfolio up to 18.

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