Irish hotel transactions reach record €720m in 2016

New research shows €182m sale of former Burlington Hotel was biggest of 51 deals

The biggest deal  of 2016 involved the sale of the former Burlington Hotel, known as the Double Tree by Hilton, for €182 million to German asset manager Deka Bank

The biggest deal of 2016 involved the sale of the former Burlington Hotel, known as the Double Tree by Hilton, for €182 million to German asset manager Deka Bank

 

A record €720 million was spent on 51 hotel transactions in Ireland last year, according to new research from Cushman & Wakefield, the commercial partner here of Sherry FitzGerald.

This included €429 million worth of deals in the final quarter of 2016, a year when tourism to Ireland hit a record level.

The biggest deal involved the sale of the former Burlington Hotel, known as the Double Tree by Hilton, for €182 million to German asset manager Deka Bank.

The hotel had been acquired by Blackstone in 2012 for €67 million. Its new owner has since rebranded it as the Clayton Hotel Burlington Road, with Irish hotel chain Dalata installed as its operator.

Next in line in terms of value was the sale of the Fitzpatrick lifestyle hotels, a portfolio of three properties in Dublin, for €150 million to the John Malone Partnership.

Off-market transaction

In terms of the price-per-room paid, the most expensive deal was the sale of the three-star Temple Bar Hotel in central Dublin for €55.1 million in an off-market transaction.

This equated to €405,147 per room and put it ahead of the Double Tree/Burlington deal at €363,273 per room. The value of the Temple Bar Hotel doubled in just more than a year, given that it had traded for €27.5 million in 2015.

Outside Dublin, the biggest deals were the sale of the Radisson Blu Farnham Estate in Cavan for €28 million, and the Lyrath Estate in Kilkenny at €25 million.

Cushman & Wakefield said 20 hotels were on the market at the end of December, half of which were sale agreed.

This included the two-star Camden Deluxe on Camden Street in Dublin for more than €8 million, Lynam’s Hotel on O’Connell Street in Dublin for a reported €6 million, and the four-star Maritime Hotel in Bantry, Co Cork, for more than €1.5 million.

A shortage of hotel rooms in Dublin supported room rates in the year, with the average hitting €128, well ahead of the previous peak of €109 in 2007. This is predicted to rise to €148 by 2018.

Highest occupancy rate in Europe

Hotels in Dublin recorded the highest occupancy rate in Europe last year at 82.5 per cent.

Kirsty Rothwell, head of trading assets at Cushman & Wakefield, said the outlook for tourism remained positive but expressed concerns about a shortage of new stock in Dublin. “While there has certainly been a significant increase in the number of planning applications and permissions granted for hotel bedrooms throughout the city, there remains a limited number of developments under construction,” she said.

Some 600 new hotel rooms were under construction in Ireland at the end of December, with another 10,000 in the planning process, of which 8,500 are located in Dublin city or its suburbs.

Top 5 Hotel Sales in Ireland in 2016

Double Tree by Hilton – price: €182m, price per room: €362,273

Fitzpatrick Lifestyle Hotels – price: €150m, price per room: n/a

Gresham Hotel – price: €92m, price per room: €284,830

Temple Bar Hotel – price: €55.1m, price per room: €405,147

Radisson Blu Farnham Estate – price: €28m, price per room: €177,215