According to the latest Savills Ireland report the dramatic upturn that Ireland’s hotel transaction market experienced in 2012 is continuing with strength in 2013 due to improvement in occupancy and average room rate (ARR). This growth in market confidence has led to a number of landmark sales.
Tom Barrett, Head of Hotels and Leisure at Savills Ireland explained, “Already this year 21 hotels have sold/sale agreed so far in 2013, totalling in €170m. This level of activity is set to continue for the remainder of 2013 with over €300m worth of transactions expected to take place. Transactional activity should be strengthened by the expiry of the Hotel Capital Allowances granted in 2005/06 and the limited remaining window to avail of the capital gains tax waiver which runs out on 31st December 2013”.
Savills say that the more notable transactions which have taken place during 2013 include the stunning Ashford Castle which sold for almost €250k a room, the River Lee Hotel, Cork which sold as an investment property with a yield of just below 8%, and Jurys Inn, Dublin 1 which sold with a yield of 11%. The Radisson Blu, Cork is currently on the market with an asking price of €8m which equates to a yield of 12.5% and the Clarion IFSC and Clarion Dublin Airport are both on the market with asking prices of €30m and €10m. Midleton Park, Carlton Atlantic Coast and The Ambassador Hotel, all located in Cork have gone sale agreed by Savills at above their guide price reflecting the positive demand in the market. Savills have a strong presence in the Cork market bringing 4 hotels to the market since the start of 2013.
Tom went on to comment, “In terms of buyers, international investors are showing a strong interest in prime city centre hotels and trophy assets located in regional locations. It is also encouraging to see domestic demand back in the market with a strong focus on hotel opportunities outside Dublin.
A large portion of hotels being sold are receivership sales. These hotels are now coming to the market at a faster pace and with realistic asking prices. As a result of this and the stronger level of demand for hotel properties, hotels are being sold in a timely manner”.