Citywest’s €45m price shows how far Dublin hotels have come
If UK crashes out of EU, huge values placed on some Dublin hotels may look very toppy
Citywest, a 764-bedroom conference and leisure property on the outskirts of the capital, is Ireland’s largest hotel
Few sectors of the Irish economy are as exposed to the prospect of a no-deal Brexit as tourism and hospitality, and there are few parts of the sector as exposed as the Dublin hotel market. The capital’s economy could be slammed.
If the optimism over a deal this weekend proves unfounded and the UK crashes out of the European Union, the huge valuations placed on some Dublin hotels in recent years may look extremely toppy in hindsight.
Citywest, a 764-bedroom conference and leisure property on the outskirts of the capital, is Ireland’s largest hotel. Developed by the late Jim Mansfield, it was bought by Tetrarch Capital and Pimco five years ago for €29 million.
In February of 2018, when a no-deal Brexit still seemed a reasonably remote threat, Tetrarch bought out Pimco’s interests in the hotel to take full control.
Brexit aside, there is anecdotal evidence to suggest that the booming Dublin hotel market may have already peaked
A note attached to accounts filed this week by Cape Wrath Hotels, the Tetrarch company that runs Citywest, suggest the hotel was bought out at a valuation of €45.1 million. Its owners believed Citywest’s value had risen by more than 50 per cent in less than 3½ years, illustrative of the optimism that flowed through the sector.
The prospect of a no-deal Brexit, however, has dampened some of the cheer across the sector generally.
Brexit aside, there is anecdotal evidence to suggest that the booming Dublin hotel market may have already peaked anyway. A glut of new properties are coming onstream. City hoteliers are also reporting a slight softening in rates.
Citywest is a fine property on a huge site on the outskirts of the city. If the economy remains in good shape, it will likely generate an excellent return for Tetrarch. But if the market turns south, its owners, like many other Dublin hoteliers, may have their work cut out.