Bidders check in with up to €150m for three Dublin hotels

Three Dublin hotels have attracted indicative bids of up to €150 million from a number of overseas bidders, signalling that investors are looking beyond the potential impact of Brexit on the industry.

The Beacon, Morgan and Spencer hotels, all managed by Fitzpatrick Lifestyle Hotels, were quietly put up for sale in recent months. They rank among more than €400 million of such assets currently on the market in Dublin.

Elsewhere, the €85 million-plus sale of the Gresham Hotel is believed to be imminent, with Spain's Riu Hotels & Resorts and Tifco, an Irish hotel company backed by Goldman Sachs, reported to be in the final shakeout.

Blackstone is selling the DoubleTree By Hilton, formerly the Burlington, for €180 million with US groups Hyatt Hotels and Host Hotels & Resorts, and the Abu Dhabi Investment Authority (ADIA) speculated to be in the mix.

Market data

ADIA backed developer Joe O’Reilly’s Chartered Land in buying the former Berkeley Court and Jurys hotels in Ballsbridge last year for €170 million.

Average revenue per available room across Dublin hotels has surged by almost 43 per cent in the three years to June, according to HotStats, a London-based firm which provides market data on the industry. PricewaterhouseCoopers said in March that Dublin’s 82 per cent hotel occupancy rate this year was second only to London across Europe.

However, Ireland's only listed hotel group, Dalata, has seen its market value fall by more than 20 per cent since the UK referendum, to €686 million. Aside from Dalata generating 20 per cent of its sales in the UK, Merrion Capital analyst Darren McKinley estimates that growth in revenue per available room "will slow considerably as fewer British tourists chose Ireland as a holiday destination".

Still, Mr McKinley continues to expect “steady growth” in tourists from the US, Europe and emerging markets.

The sale of the three Fitzpatrick-run hotels, including the Spencer, which is majority owned by London-based Patron Capital, is expected to move into a second stage of bidding next month. Initial offers are believed to have been between €130 million and €150 million.

A spokesman for Blackstone declined to comment, while efforts to contact Paul Fitzpatrick, who set up Fitzpatrick Lifestyle Hotels in 2001, and property developer Bryan Cullen, whose Precinct Investments bought the Gresham in 2004, were unsuccessful.