Hotel sales on course to yield more than €1.2bn this year

Slieve Russell Hotel

Donal Buckley

Ireland’s hotel market could set new records this year with more than €1.2bn worth of hotels changing hands, as the sector was the only one to record positive sales growth in the European property market during the 12 months to the end of March, according to CBRE research.

That level of sales would be more than three times the €350m worth of hotel sales in 2023, which was some 30pc below the annual average of €500m.

Already major deals have pushed sales this year to over the €550m mark, with Archer Hotel Capital, a European investment group, buying the Shelbourne Hotel, in Dublin city centre, for around €250m.

In addition, Lifestyle Hospitality Capital Group, backed by Elliott Investment Management, bought into the eight Dean hotels in Paddy McKillen Jr’s group in Dublin, Galway and Cork, the Clarence in Dublin and the Devlin, in Ranelagh.

That deal, said to be based on an enterprise value of €350m for the group, also included two planned hotels in the UK.

Also included in sales to date has been the Jacobs Inn, near Connolly Station, in Dublin, which was sold by a BlackRock fund to Azora for around €30m.

Azora is expanding its hostels investment portfolio.

Another hotel, the G in Galway, is also believed to be sale agreed. CBRE had been guiding €26m for it. Among those currently on the market are the Slieve Russell Hotel in Cavan, which had been part of Sean Quinn’s empire and which is guiding €35m.

In Dublin city centre, Zetland Capital appears to be taking advantage of the market demand by seeking around €100m for the Morrison Hotel, overlooking the River Liffey. That’s about €35m more than Zetland was reported to have paid Russian billionaire Yelena Baturina for it in 2021.

The Scally family, the owners of Hayfield Manor hotels in Munster, are believed to be front runners to buy the Radisson Blu St Helen’s, in south Dublin.

Also on the market is Mount Juliet golf resort in Kilkenny, as Irish property group Tetrarch continues to wind down its hotel portfolio. JLL Ireland is guiding €45m for the 125-bedroom hotel with its Michelin-starred restaurant and 500-acre estate. Tetrarch, which also owns CityWest Hotel, is reported to have paid €15m for it in 2014.

Colin Richardson, of CBRE, said investors are attracted to Irish hotels because of “their strong trading performances, dynamic hotel room pricing in a high inflationary environment, the shift away from investment in traditional core sectors at present, the under-supply of ‘beds’ across Europe, and the projected growth in air travel”.

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