Dalata pays €27m to buy freehold on Cardiff hotel
Published 27/10/2016 | 02:30
Ireland's biggest hotel group, Dalata, has agreed to pay about €27m (£24m) for the freehold of the Clayton Hotel in Cardiff, which it operates.
The purchase comes amid a slump in sterling, which makes acquisitions in the UK much cheaper for Irish companies.
The Cardiff property - which has 216 bedrooms - was opened in 2011.
It was built by Rush Developments, which is owned by south Wales developers Kim Tonks and Ian Jones. They spent £25m on the project, on which Northern Ireland construction firm McAleer & Rushe was the main contractor.
The four-star hotel operates under Dalata's Clayton brand, and is close to Cardiff's central train station and its main rugby stadium.
Dalata has a lease on the hotel that expires in 2046. It has been paying an annual rent of £1.5m, subject to upward-only rent reviews at five-year periods.
Dalata's deputy chief executive, business development and finance, Dermot Crowley, said the Cardiff hotel had performed "very strongly" this year.
"This transaction is consistent with our stated strategy of buying out the freehold interests of those leased properties with future unpredictable rent reviews," he said.
The company recently paid €8.1m to buy the freehold interest of the Maldron hotel in Cork.
Dalata chief executive Pat McCann said during the summer that the hotel group would temper expansion plans in the UK following the Brexit vote.
The group owns about 25 hotels, leases another 10 and also manages seven properties.
The acquisition of the Cardiff freehold means it now owns seven properties in the UK, including two in London. It also leases another property in London.
In the first half of the financial year, Dalata posted revenue of €130.1m, which was 33p higher year-on-year.
Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) rose 50pc to €35.3m.