The new owners of Le Meridien Shelbourne on St Stephen's Green, one of Dublin's landmark hotels, plan to spend £10 million (12.70m) on upgrading and refurbishing the property. The hotel has changed hands for the third time in five years, and now belongs to Royal Bank of Scotland (RBS) and Nomura, a Japanese investment corporation.
The complicated sale and leaseback deal values the Shelbourne in the region of £70 million sterling, the highest price tag of any hotel in Ireland. The owners, RBS, are leasing the hotel to Nomura on a 30-year lease, with an option to extend it for a further 10 years. The performance related lease provides for a minimum return of 6 per cent on the purchase price.
David Harper, associate director of Richard Ellis Insignia, who was involved in putting the deal together, said that RBS will be "making a significant investment in the Shelbourne, and will probably spend in the region of £10 million upgrading and refurbishing." However, there are no plans for a name change, "It would be madness to even consider," he said.
The top end of the lucrative five-star market in Dublin will see intensified competition from the Shelbourne for business against newcomers, the Merrion and Four Seasons, and soon-to-open Westin. The five-star market will become even more competitive with the opening of Druids Glen next year and Carton Demesne Estate in two years time.
In 1996 the Shelbourne had been part of the Forte Hotel Group which was bought by Granada in one of the most acrimonious takeover battles of the 1990s. The head-to-head between Gerry Robinson of Granada and Sir Rocco Forte saw Granada retain the Forte name and the Forte family walk away with £300 million (380.92). In the meantime following merger and demerger with Compass, Granada has passed on its hotel interests to the food service corporation. Compass then set to divesting themselves of all its hotel interests.
Sir Rocco, on a visit to Dublin last week, said that he is still not sure how he feels about the Shelbourne. Following the takeover of the Forte group he had raised £1 billion (1.27bn) to finance a buyback of the Le Meridien hotels including the Shelbourne. However completion of the deal had not been possible. The Shelbourne had been one of his favourite hotels, and now that ownership has changed again, perhaps he can feel comfortable walking back through the door. With the backing too of the Royal Bank of Scotland, Sir Rocco now has seven hotels in Europe. They trade under the name of RF Hotels. The seven include hotels in Edinburgh, Manchester and Cardiff, Florence, Rome, Brussels and St Petersburg. He recently bid for a Palazzo in Venice, and if planning permission is forthcoming, he pledges to make it "the most expensive hotel in the world." RF Hotels had considered Dublin as a location
