Shares in hotel group Dalata open up in trading debut
Published 19/03/2014 | 02:30
Shares in Dalata Hotel Group opened up on its trading debut today on the Irish Stock Exchange.
The shares gained 20c to €2.70 on its debut giving the company a market capitalisation of €286m as the hotel management company joins a host of new listings aiming to ride the recovery of the Irish property market.
Shares were trading at €2.75 at 9am.
Dalata raised €265m in its IPO yesterday - the shares are now available on the ESM in Dublin and AIM in London.
The amount raised was well above previously stated targets – Dalata had indicated it was aiming for between €150m and €200m.
The sale was oversubscribed, the company said, with strong interest from international institutional investors in the US, Europe, UK and Ireland. US asset manager Marketfield, which has an interest in Bank of Ireland, bought a stake.
“As the largest hotel operator in Ireland, we are delighted to be in a position to join the Irish Stock Exchange today," said Pat McCann, chief executive.
"Our flotation on the ESM has enabled us to attract international investors and also provides us with a platform for future fund-raisings. A market listing raises our profile in Ireland and internationally which is also important for our business.”
Deirdre Somers, chief executive of the ISE, added:“Tourism is a key sector for the future growth of the Irish economy and we are delighted that Dalata has utilised the Irish Stock Exchange to source the international capital it needs for expansion. Dalata’s successful IPO demonstrates that public markets are open to Irish companies with attractive investment opportunities.”
The proceeds will be used to acquire 16 and 25 more three-star hotels, build hotels in the under-supplied Dublin region and pay down €4.1m of debt. This will mark a new chapter for the firm, which does not currently own any properties and instead operates them on long-term leases or management contracts for other owners.
Dalata currently operates 40 hotels, including the 13-strong Maldron chain, covering 6,100 rooms. All of these are located in Ireland, other than the Maldron Hotel Cardiff in the UK. Any acquisitions will be in Ireland, Dalata said.
Dalata's fundraising comes as state debt manager the National Asset Management Agency (NAMA) prepares to bring a number of prime Dublin hotels to the market. NAMA has an interest in one out of every seven hotels, the 'Sunday Independent' recently revealed.
Its listing comes just months after the establishment of the country's first real estate investment trusts (REIT) with successful initial public offerings last year by Hibernia REIT and Green REIT. Irish commercial property prices recently steadied after falls of around 65pc following the collapse of the market in 2008. This has led to a surge in demand from international investors for hotels, office blocks and retail units.
One of the biggest commercial property agents in the country, CBRE, said in December that there are more than €140m-worth of hotel deals in the pipeline already for this year, with many more to come.
A steady rise in tourism and domestic hospitality demand is also spurring interest. The price of a night's stay in an Irish hotel rose 2pc to €92 last year, new data from booking site Hotels.com showed, a third consecutive year of gains.