Dalata agrees to pay €30m for freehold of two hotels
Dalata, Ireland's biggest hotel group, has agreed to pay a total of almost €30m to buy the freehold interest in two Dublin hotels.
The company, which is headed by chief executive Pat McCann, said it's paying €15.3m to acquire the freehold interest of the Maldron Hotel on Parnell Square. That transaction is due to close in August.
Dalata has agreed to pay €14.4m for the freehold interest in the Pearse Hotel on Pearse Street. The transaction includes adjoining retail and office properties.
The purchases mark the first by Dalata since it floated on the stock exchange back in March.
Dalata has operated the three-star Maldron Hotel on Parnell Square since it opened in 2007, with an annual rent of €1.1m under a 25-year leasehold agreement. Mr McCann described it as a "key property" in the Maldron chain.
There are currently six Maldron hotels in the capital, including three in the city centre, another at Dublin Airport, one in Tallaght and another in Citywest.
Dalata plans to carry out what it described as an "extensive refurbishment programme" at the Pearse Street property to restore it to a "high quality four-star hotel". It will be rebranded under the Maldron name.
Dalata is paying cash for both properties.
The Parnell Square hotel has 126 rooms as well as two conference rooms. The property on Pearse Street has 101 bedrooms and five conference rooms. It made a €700,000 profit last year.
The Pearse Hotel was being sold by CBRE's Dermot Curtin on behalf of receivers to Johnny Moran's Citywide Leisure company. The property had initially guided at €9m as well as an additional €1.55m for the adjoining commercial properties, but strong interest from home and abroad drove the price higher.
Dublin's strongly performing hotel market has been attracting significant investor interest, with a number of deals being completed in the last two years. A mix of domestic and international players have all waded into the market.
The capital had the best performing hotel market in Europe last year, while PwC has predicted it will top the league again this year and be pipped into second place in 2015 by London.
PwC said that revenue per available room in Dublin rose 11pc last year.
Occupancy rates have also soared. They're now at pre-recession levels, and will hit 79pc this year compared to 67pc in 2007. The rate is expected to hit 80pc in 2015.
A number of foreign investors have bought up hotel properties in the capital and elsewhere in Ireland in the past couple of years.
Planning permission was granted for a new hotel on Dublin's Camden Street earlier this year.