A portfolio of a hotel, aprtments and retail units have sold for more than €3m above its asking price, in a strong endorsement of the provincial commercial property market.
The former Savoy Hotel in the centre of Limerick together with adjoining 84 unit apartment complex and 6 high profile retail units on Henry Street has been sold for a sum believed to be in excess of €17m following competitive bidding process. The portfolio had gone up for sale in June with a total guide of just over €13m.
The 94 bedroom purpose built hotel developed to a 5 star standard is currently managed by Ronan Brannigan & Michael Roche and it is believed that they are part of the successful Purchasers consortium and will continue to operate the Hotel.
The apartments are fully let producing gross rental income of approximately €660,000 per annum and the retail units which include Laura Ashley, Schuh and Hamptons Restaurant as tenants, produce further €575,000 per annum.
The sale was conducted by William O'Riordan of PwC as Receiver for Fordmount Developments Ltd (In Receivership) through Joint Agents BNP Paribas Real Estate and Rooney Auctioneers Limerick.
Neither BNPRE's Peter Flanagan now Rooney's Gordon Kearney were available to confirm the sale price achieved but it is understood that the portfolio has been sold for a sum in excess of €17million following receipt of close on a dozen expressions of interest from both local and International Investors.
The apartments and the shops are currently producing an annual rent of €1.235m, which equates to a gross yield of 12.12pc.
The tenants of the retail units will not be affected by the sale.
The Savoy Hotel comprises a five-Star, 94-bedroom hotel that was completed in 2007 and originally traded as a Marriott-branded Hotel after it opened.
The hotel has five junior suites and 89 bedrooms, which come in a mix of double and twin rooms.
There is also a bar and restaurant at ground floor level, and a lounge area and two private lounge areas at first floor level.
In addition, there are 10 meeting rooms at second floor level and a leisure centre at basement level.
The City Central Residences, on the other hand, comprise a wholly owned apartment block with 84 units producing a gross rental income of around €660,000 per annum.
The hotel was built by the Fordmount Property Group in 2007, but that construction company fell into receivership, along with two of its subsidiaries, in late 2009, reputedly with liabilities estimated at €200m.
The sale of this portfolio is was closely watched because it is one of the few major regional commercial portfolios to come to the market in recent years.
There has been huge interest in major hotels and other large developments in Dublin, especially from overseas investors. As yet, though, that interest has yet to translate into solid purchases in the provincial markets from those same investors.
As a result, few major developments in a "walk in" condition have come to the market so far. However, as shown by this sale, that situation could be finally beginning to change.
Sunday Indo Business