Cork hotel bought by China investor visa specialist
Group ‘hasn’t decided’ on syndication deal under investment-for-visa scheme
A file photograph of a bedroom at the Clonakilty Hotel in Co Cork, which has been bought by the Pu Yuan group.
A Dublin-based company that specialises in promoting investment-for-visa deals to Chinese millionaires has bought a hotel in west Cork, and says it is on the lookout for more Irish hotel properties.
The Pu Yuan group says it is unclear, however, whether its latest deal, for the Clonakilty Hotel, can be syndicated to wealthy Chinese investors under the State’s Immigrant Investor Programme (IIP), which is currently under review after raising about €500 million in foreign funding over six years.
The scheme is dominated by Chinese investors, who represented 97 per cent of the roughly 320 applications in 2017. About 90 per cent of the Chinese applications were approved, the Department of Justice said on Monday.
Pu Yuan, which also operates under the moniker Prime Value Capital Management (PVCM), closed a deal to buy the Clonakilty Hotel from a local family in the days immediately prior to Christmas.
It is the third Irish hotel bought by the group, which paid €2.5 million for Butler’s Townhouse in Dublin 4 in 2014, and €1.8 million for the Strand Hotel in Bray in 2017. The value of the Clonakilty deal was not disclosed, but the 31-bedroom property is likely to have changed hands within a similar price range.
PVCM says it syndicated the Butler’s and Strand deals to wealthy Chinese investors under the IIP, which is open to visa-seeking foreigners with a net worth of at least €2 million, and who invest at least €1 million in an Irish asset.
‘Not yet decided’
However, PVCM said it “has not yet decided” whether to take the same route with the Clonakilty Hotel.
“We are waiting to hear confirmation from the department about whether the IIP scheme is still open for hotels,” said David Cao, PVCM’s Dublin-based investment director.
“The department tells us that the scheme should only be used to buy hotels that are out of business, with a plan to reopen them and create new jobs. We are very careful about how we use the IIP scheme.”
When asked if, pending clarification, the group still intended to syndicate the Clonakilty Hotel to Chinese investors, Mr Cao replied: “I think so. But that is not confirmed yet. [For now] the hotel has been bought by our company as a normal transaction and not for any individual investor.”
Company documents compiled for the Clonakilty deal suggest the transaction was financed by Relm Finance, an Irish non-bank lender that is backed by the US fund Avenue Capital and Richard Barrett, the former Treasury Holdings developer with strong business links to China.
The operation of IIP is currently under review by the State, with a report due by February. Late last year, the Department of Justice warned scheme promoters in a note that applicants who borrow the cash won’t get IIP approval.
The investor programme was introduced at the nadir of the State’s economic slump in 2012, as the Fine Gael-led coalition sought ways of attracting foreign investment.
The most recent data available shows that about €500 million of investments were approved in its first six years. Eligible foreign investors can get Irish residency visas for up to five years, after which they can apply for citizenship.
Pu Yuan and PVCM is controlled by a Cayman Islands company that is beneficially owned by Chinese property executive Yansong Chen.