Kennedy Wilson spends €36m refurbishing crown jewel Shelbourne
Major work now completed at five-star hotel
The redesigned Lord Mayor’s Lounge in the Shelbourne Hotel, Dublin. Photograph: Dara MacDónaill
Kennedy Wilson has spent $40 million (€35.7 million) in recent years refurbishing the five-star Shelbourne Hotel in Dublin, the Californian property group has said of its most profitable and most important asset.
The completion in the first quarter of the overhaul of the storied hotel’s lobby marks the completion of all major works in the building, Mary Ricks, president of Kennedy Wilson, said on a call with analysts late last week.
Although net operating income from the hotel dipped temporarily in the first three months of the year as the hotel was partly closed, “the stunning new reception is a hit with our guests” and will drive average daily revenues and income in future, he said, according to a transcript of the call.
“The Shelbourne remains our top net operating income producer globally and strategically is the key asset for us,” she said of the hotel, which has an estimated $16.4 million in annual net operating income.
Kennedy Wilson, one of the first major overseas buyers of property assets following the crash more than a decade ago, spent $152 million in early 2014 taking control of the Shelbourne by acquiring debts tied to the hotel from Irish Bank Resolution Corp, formerly Anglo Irish Bank.
The property group’s other assets in the Republic include the Portmarnock Hotel and Golf Links, Stillorgan Shopping Centre, and Clancy Quay apartments complex in Dublin 8, the third phase of which is expected to completed by the end of the year, delivering a total of 845 units, which it calls “the largest multifamily community in Ireland”.
Kennedy Wilson executives also revealed on the call that the group has managed to take all its equity off the landmark Capital Dock mixed-use project by completing a $293 million refinancing of construction loans attached to the scheme. The new loans carry a 1.56 per cent interest rate, the cheapest finance Kennedy Wilson has ever secured.
The National Asset Management Agency has a 15 per cent stake in the project, which cost $400 million to complete. In March, JP Morgan officially opened its new Irish base in an eight-story building in the Capital Docks campus which the US investment bank bought for €106 million.
Ms Ricks said the group was “making excellent progress” on the retail component of the project and was set to have fully leased the entire 26,000sq ft available by the end of June, with all units occupied by the end of the year.
“We’re also seeing strong demand for our high-quality, multifamily units at Capital Dock,” she said of the 190 apartments in the scheme. The two-bedroom units have been marketed at a price range between €3,500 and €4,000 a month.