Business Irish

Saturday 16 December 2017

Nama may be banker for some of the world's top hotels


NAMA could end up as banker to some of the top hotels in the world -- boasting famous names like the Connaught and Claridges in London and the Shelbourne in Dublin among its portfolio.

Many of the top 10 largest developers own or have shares in hotels. The first €17bn of loans will move to the National Asset Management Agency in the next two weeks, according to Finance Minister Brian Lenihan.

The result eventually could be that between 100-200 hotel-related loans will be transferred into Nama -- but it's likely that the developers who initially bought the hotels will stay on to manage them on behalf of Nama.

But some of the most luxurious hotels in Britain or Ireland could come under the scheme.

These are likely to include landmark London hotels the Berkeley, Claridges, and the Connaught, which are owned by financier Derek Quinlan's Maybourne Hotel group. Mr Quinlan, a former tax inspector, quit Ireland for Switzerland last year, after parting ways with the company he founded, Quinlan Private.

Together with a consortium of investors, he acquired the three hotels along with the Savoy for £750m but subsequently sold the Savoy to a Saudi prince.

The first stage of the transfer could also include some of Ireland's best-known and most luxurious hotels, including the Shelbourne, the K Club, the Ritz Carlton hotel in Wicklow, and the Radisson and G Hotel in Galway.

One of the developers, Gerry Barrett, won praise for his glamorous hotels like the G Hotel in Galway and he also owns Ashford Castle.

The G Hotel was designed by milliner Philip Treacy.

However, a spokeswoman for the Ashford Castle hotel said yesterday it was not going to be included in Nama, and was benefiting from a very strong overseas market.

The Shelbourne in Dublin was redeveloped at a cost of €1m a room after its owners bought the property for €140m in 2004. A further €125m was spent refurbishing the hotel. The hotel is owned by a consortium of investors including Bernard McNamara, who is facing financial pressure on a number of fronts.

Nama is also expected to take over loans related to developer Gerry Gannon's half-share in the K Club golf club complex, though there is speculation that the club's founder Dr Michael Smurfit may consider other options .

Irish Hotels Federation chief executive John Power said that, in one aspect, Nama would be able to address excess capacity.

He pointed out that Peter Bacon estimated there were between 11-15,000 excess bedrooms, which could equate to 70-100 hotels, which needed to be managed out of the system.

Mr Power also wants Nama to come up with a strategy to get rid of so called zombie hotels, hotels being sustained by the banks despite being insolvent.

Sunday Independent

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