Burlington and Gresham sales continue strong year for hotel market
The Gresham Hotel in Dublin is likely to sell for comfortably more than its €80m asking price after first round bids were submitted last week.
With a host of US investors bidding for it, the final price is likely to be between €5m and €10m above its initial asking price.
It is a similar story on the other side of the city, where the former Burlington Hotel - now the Doubletree Hotel Burlington Road - is being marketed for between €140m and €180m.
The prices of both hotels will dredge up memories of the Celtic Tiger but in truth the sales will be for well below their boom time valuations.
Precinct Investments paid €117m for the Gresham in 2004, while developer Bernard McNamara forked out €288m for the Burlington Hotel in 2007.
The prices however will be much higher than they were even a few years ago. The Gresham was valued at €48m as recently as a year ago, while US private equity giant Blackstone paid €72m to buy the Burlington in 2012.
In the Burlington's case, Blackstone invested heavily in the hotel. The private equity giant completed a €17m refit of the property last September and added the hotel to its Doubletree by Hilton brand.
Even with the investment, the hotel will still turn a profit of more than €50m for Blackstone, and that is at the low end of expectations.
So what is driving this interest in little old Ireland?
In short, there is a shortage of hotel rooms in the country and Dublin especially, and there aren't any extra rooms becoming available for at least a year.
According to data from travel information provider STR, revenue per available room - a key measure of the profitability of a hotel - is among the highest in Europe.
And property agent JLL believes this will drive another busy time for the hotel market over the rest of this year.
"This year is another exciting year, and with Ireland's hotel demand and supply dynamics rapidly evolving, there is still value left in Irish hotels, although it may be becoming more difficult to find it," said JLL's senior vice president for hotels and hospitality Daniel O'Connor.
JLL say there was a greater number of hotel transactions in 2015 than any year since at least 2000 and transactions are now very much back at peak levels.