Five-year lease for Ballsbridge hotels
THE LONG-RUNNING saga that followed the payment in 2005 of excessive prices for the Jurys and Berkeley Court hotels in Ballsbridge, Dublin 4, is about to take another twist with the decision by the consortium of banks involved to lease the two hotels for five years before deciding whether to offer them for sale.
The syndicate of lenders led by the Ulster Bank took control of the hotels last January from developer Seán Dunne, who bought them at the peak of the property bubble for €400 million.
With a current one-year lease of the two hotels due to run out on January 20th next, the banks have instructed Savills to invite offers for a five-year lease now that the Dublin hotel market is experiencing a significant recovery in business.
Several overseas hotel chains, as well as a range of Irish hotel management companies, are expected to pitch for the business, not only because of the prime Dublin 4 location but more particularly because of the large number of bedrooms involved – a total of 577 in two adjoining blocks.
The two hotels achieved a room occupancy rate of more than 90 per cent last month, equating to 16,000 bedroom sales. Even at an annual occupancy rate of 70 per cent, average room rates of €65 could bring in total revenues of €9 million. Once food, beverage and other sales are added, the total annual turnover could be in the region of €15 million. A management company settling for 30 per cent of the profits would end up with an overall fee of €4.5 million.
In a more buoyant market, annual sales of €18 million and a 33 per cent profit margin could give a management company profits of €6 million per annum.
Tom Barrett, head of hotels and leisure at Savills, said it was rare enough that two prestigious hotels of the size and potential of the Ballsbridge properties were offered for lease on the international market.
After taking control of the two Ballsbridge hotels last January, the bank consortium appointed Dalata Hotel Group, run by former Jurys Doyle chief executive Pat McCann, to manage them for a period of 12 months. That arrangement has coincided with a steady growth in not only the bedroom occupancy rate also in the number of conference and wedding receptions held there.
The former Jurys has conference facilities for up to 1,000 people and can seat 650 at dinner. The former Berkeley Court can accommodate up to 450 people at conferences and 300 for sit-down meals.
The ground floor in the former Jurys has been extensively refurbished in the past year following flood damage caused by heavy rainstorms last October.
The former Jurys, now trading as Ballsbridge Hotel, is a three-star business with 392 bedrooms and suites. There are also 13 meeting rooms. The 4.3-acre site has extensive car-parking.
The former Berkeley Court, now known as the Clyde Court Hotel, has moved into the four-star category and has 185 bedrooms including 31 suites. There are eight meeting rooms. The 2.5-acre grounds include 16 apartments in a separate block which are all fully let.
Shortly after acquiring Jurys hotel for €275 million and the Berkeley Court for €125 million in 2005, Dunne unveiled plans to build a Knightsbridge-style high-rise development on the combined 6.8-acre site, with a 37-storey tower as the centrepiece of a €1.5 billion development.
The plan proved highly controversial and was rejected in January, 2009, by An Bord Pleanála. The two properties subsequently reopened as budget hotels under the D4 brand, offering rooms for as little as €37 a night.
A convenience store which also opened on part of the ground floor has since been closed.