Monday 26 September 2016

Dalata plans to tap the market for €150m more to buy hotels

Published 06/09/2015 | 02:30

Dalata chief executive Pat McCann issued a statement of intent at the group's AGM in May
Dalata chief executive Pat McCann issued a statement of intent at the group's AGM in May

Hotel group Dalata is to raise €150m in the coming weeks to fund more hotel purchases, the Sunday Independent has learned.

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It will raise the money by issuing new shares, it is understood. The company is due to announce half-year results on Wednesday and may reveal its fundraising plans then.

Dalata has already raised over €500m since launching on the Irish Stock Exchange last year, with an initial capital raise of €265m supplemented by debt. Its share price has soared by 40pc since listing.

The decision to raise another warchest for acquisitions comes despite its recent failed bid for the Berkeley Court in Dublin's Ballsbridge. Dalata was outbid by developer Joe O'Reilly, who paid €170m for the Berkeley Court and Jurys.

Dalata's fundraising should allow it to bid for a number of hotels that will be put up for sale in the next few months as Nama and Ulster Bank accelerate their disposal of loan portfolios and assets.

Chief executive Pat McCann said at the company's AGM in May that it was "not a company that is going to sit patiently by and watch the opportunities disappear".

Control of many of Ireland's biggest hotels has changed hands recently. Buyers, including Deutsche Bank and US billionaire John Malone, have purchased loans connected to hotels such as the G in Galway and the InterContinental in Dublin (formerly the Four Seasons).

"Irish hotels offer a significant opportunity for returns" said Aiden Murphy, partner at Crowe Horwath.

"Demand is accelerating but average rates per room remain almost 16pc lower than pre-recession levels - they are only going to go up."

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