Hotels and debts could be sold for up to €200m

High profile hotels include Clayton Hotel at Ballybrit and Whites in Wexford

 

Ulster Bank is to proceed with the sale of assets and loans relating to eight hotels and two hostels as part of its ongoing divestment from the troubled hotel market.

Agents CBRE and the professional services company KPMG have been engaged to handle what is probably the largest portfolio of hotels to be offered for sale in this country. The overall valuation of the properties including related debt is expected to range from €150 million to €200 million.

The hotels and hostels in Project Nadal are likely to be sold in 10 different lots or as a single portfolio and include a range of properties developed during the boom when the market was driven by investors anxious to avail of tax breaks.

A considerable number of other hotels opened over the past 10 years and funded by a variety of banks are also due to come on the market in the coming year or two. Some of them are understood to have been financed by Ulster Bank’s parent, Royal Bank of Scotland, and, according to a spokesperson, the bank has identified a broad pool of commercial property assets valued at £9 billion to be offloaded in the aftermath of the property collapse.

Conference venue

One of the hotels to be sold includes the four-star Clayton Hotel at Ballybrit in Galway, which will be well known to many Galway racegoers. The 195-bedroom hotel opened for business in 2007 and is expected to sell for between €12 and €14 million – significantly less than its original cost. It has extensive conference and banqueting facilities and a 20m swimming pool with sauna and steam room.

Although Whites Hotel has been a well-known landmark in Wexford for a great many years, it was given a new lease of life in 2006 when it was redeveloped and enlarged at a cost of €55 million to become one of the best conference venues in the southeast. The four-star hotel with 157 bedrooms is currently in receivership and is expected to sell for between €10 and €12 million.

Equally impressive is the Dunboyne Castle Hotel, within 12 miles of the city centre and expected to sell for between €10 and €12 million. The four-star is based on a classical period castle and has a three-floor spa and 150 bedrooms.

The mix of properties going for sale also includes two of the best known hostels in Dublin city centre. Jacobs Hostel off Talbot Street and near Busáras has 400 bed spaces and is likely to be priced between €6 million and €8 million. Also for sale is Hostel Avalon on Aungier Street which can accommodate about 300 guests. It is expected to be valued at between €4 million and €5 million.

The loans on five leading hotels are also for sale but neither CBRE, KPMG nor Ulster Bank have identified the properties involved. However, market sources have confirmed the list includes the Radisson Blu Royal Hotel at Golden Lane, off South Great George’s Street in Dublin 2; the Radisson Blu Hotel at Dublin Airport; the Hilton Hotel in Kilmainham, close to Heuston Station; The Arlington Hotel at Lord Edward Street, Dublin 2, and The Merchant Hotel in the centre of Belfast.

Trading well

The four-star property in Golden Lane is exceptionally well designed and finished and has 150 bedroom which appeal to visitors wanting to stay in the city centre. It attracts a daily room rate of €182, almost double the €99 charged by the Radisson Blu at the airport for many of its 229 rooms.

The Hilton is also trading well, frequently attracting a single room rate of €191 for some of the 110 bedrooms. The hotel is conveniently located at Kilmainham on the edge of the city and has a hydrotherapy pool, jacuzzi and sauna.

The 63-bedroom Arlington Hotel backing on to Temple Bar is one of the most competitive in the city and is currently offering two nights bed and breakfast and one dinner for €99.

The five-star Merchant Hotel at Skipper Street in Belfast has 62 bedrooms and is currently offering bed and breakfast per person sharing at £90.