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Huge boost for hotel market

The hotels market has had a busy few months with a number selling or going sale agreed as more have come to the market.

This contrasts with recent years when receivers and banks appointed managers to run hotels or kept them in moth balls because of the difficulty of finding buyers.

Paul Collins of CBRE points out that despite the poor weather, hotel occupancy and room revenues have improved and boosted confidence among operators and buyers.

Room occupancy rates have increased from 70.6pc in July last year to 72.2pc this year while revenue per room (revpar) has jumped from €57.01 to €62.98 or 10pc over the period according to STR Global figures.

Other sources believe that these positive trends have helped some existing owners of prime hotels to negotiate refinancing deals with AIB and Bank of Ireland when their original overseas bank agrees to discount an outstanding loan, thus enabling owners to cut the loan to value ratio. It will be interesting to see how the sale by Lloyds of chunks of property loans at sharp discounts will effect such refinancing activity.

Tom Barrett of Savills says the increase in revpar combined with Ireland's image as being the good boy of Europe has sparked recent interest from international buyers.

"It has also helped that both sellers and buyers have matching ideas on prices and that banks are beginning to fund the purchase of properties which have healthy cash flows."

On the other hand Tony Morrissey points out that just because a sale is agreed does not mean that it will go through, especially at a time when banks and other parties are being extra careful that all aspects of the paperwork are in place.

One of the most valuable deals agreed has been Jurys Inn, Parnell Street, Dublin 1, as an investment property for which Savills had been guiding around €23m.

Other Savills sales agreed include Cork International Airport Hotel which had been asking around €5m; the 45- bedroom Ashourne House Hotel in Co Meath for over its asking price of less than €1m and the Harbour View Hotel in Schull, West Cork for just below €1m.

The latter hotel had ceased trading for some time but it came with 30 bedrooms and eight apartments.

In July Mr Barrett completed the sale of The Clare Inn to the owners of Dromoland Castle, an adjoining property in Co Clare for €2.1m.

CB Richard Ellis has also gone sale agreed recently with three hotels. The Kilkea Castle Hotel near Castledermot, Co Kildare, had been guiding €3.25m.

In Carlow the 42-bedroom four-star Killerig Hotel has also gone sale agreed. While the asking price was not disclosed, it had been expected that the hotel could fetch €2.5m.

On the Clare/Tipperary border The Kincora Hall Hotel has gone sale agreed. CBRE had been guiding over €500,000 for the 31-bedroom property with 150-seat function room on a two-acre site.

Morrisseys have also gone sale agreed on two Dublin hotels including Tramco/Days Inn in Rathmines, Dublin 6 for which the asking price had been €1.65m.

The Bailey Court, a former 20-bedroom hotel, on a 0.38 acre site on the Main St in Howth, Co Dublin had been asking €950,000.

The agency has set a deadline of 3pm today for full and final offers for the Milford Inn, Milford, Co Donegal, a 33-bedroom hotel for which it has been guiding €800,000.

Indo Property