Thursday 29 September 2016

Group led by Gresham's manager expected to bid for the iconic property

Published 20/09/2015 | 02:30

The 301-room hotel, which dates back to the early 1800s, is expected to be put up for sale by NAMA next month
The 301-room hotel, which dates back to the early 1800s, is expected to be put up for sale by NAMA next month

A group led by the Gresham Hotel's general manager and backed by an American hotel management company is likely to bid for the Dublin institution.

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The 301-room hotel, which dates back to the early 1800s, is expected to be put up for sale by NAMA next month.

Windward Investments, which is led by the Gresham's general manager Patrick Coyle, and the fourth largest hotel management company in the US, Pyramid, is likely to make a play for the property.

Pyramid bought the 132-bed Temple Bar Hotel earlier this year from insurance group FBD for a reported €30m, with Winward taking over the day-to-day management of the property.

The group would probably continue to operate the Gresham as a hotel rather than attempt to convert it into retail or office space.

NAMA took control of the Gresham from Precinct Investments, the company owned by builder Brian Cullen.

Precinct took the Gresham Hotel group private in 2004, in a €117m deal. It also owned Cork's Metropole Hotel and the Park Inn in London but sold those properties shortly before its loans passed into NAMA.

The country's biggest hotel operator Dalata has said it will bid for the hotel. Dalata chief executive Pat McCann indicated it could sell for somewhere north of €60m. Dalata recently raised €160m to build a war chest for acquisitions.

US billionaire John Malone, Kennedy Wilson Europe - which recently bought Kildare's Carton House - and Japanese hotel chain Toyoko Inn are other likely bidders, industry sources said. Toyoko Inn is owned by the Nishida family, who bought Charlie Haughey's former estate Abbeville two years ago.

Next door to the iconic Gresham, meanwhile, work is nearing completion on a new 198-bedroom hotel - only the second new one built in the capital since the beginning of the recession after Tetrarch Capital's Marker Hotel. Tetrarch is not expected to bid on the Gresham.

Findlater House on Dublin's O'Connell Street is being turned into a Holiday Inn Express. It is expected to open early next year.

Demand for hotel beds in Dublin is soaring, experts say. Occupancy levels in the capital stood at 77.2pc in 2014 compared to a national average of 67.8pc, according to Crowe Horwath Ireland's hotels survey.

The average rate charged for a room in Dublin is now €97.25, up from €90.73 on the previous year, representing a 7.2pc increase year-on-year. While room rates in the capital are some way off 2006 peak prices of €120.38, the average nightly cost per room is still significantly ahead of other regions (€79.36 in Midlands & East; €79.43 in South West; and €67.50 in Western Seaboard).

"While the focus of the industry leaders has been on delivering higher tourist numbers there needs to be a strategy to ensure that new hotel supply is introduced to the Dublin market so there is sufficient room supply to cope with the projected increase in tourism numbers through the ongoing overseas marketing strategies that are yielding success," says Crowe Horwath partner Aiden Murphy. "We would urge immediate attention be given to fast tracking a pipeline of new supply to meet the growing level of demand in the Dublin market."

Sunday Indo Business

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