Irish hotel sales on track to be close to €1bn by year-end
The value of hotel sales in Ireland could be close to €1bn by the end of the year, according to property consultants, Savills Ireland.
In its latest commentary on the hotel property market, Savills reports that an acceleration of activity in the second half of the year has seen the combined value of transactions surpass previous expectations.
Tom Barrett, Head of Hotels & Leisure at Savills Ireland commented: “At this point, it looks certain that the value of transactions will be in excess of €500m this year. However, that figure could potentially double if, for example, The Moran & Bewleys hotel group – which own 10 hotels in Ireland and the UK (2,627 rooms) – is sold. Either way, 2014 will be a record year for hotel sales in the current market cycle.”
Savills notes that this uplift could be driven by portfolio sales of hotel assets – something that hasn’t been seen in the Irish market for over a decade.
“With NAMA and Ulster Bank looking to accelerate disposals, portfolio sales have become more commonplace. Projects Venue, Crystal and Nadal alone will contain almost 20 Irish hotels in portfolio sales and they are attracting a range of buyers including existing hotel owners/operators, new market entrants and institutional investors with a mix of Irish, UK and US interests competing.”
In net terms, almost 20,000 jobs have been created in the tourism industry since Q1 2012. Several factors have supported this – including The Gathering, the Wild Atlantic Way and the reduced VAT rate on tourism. However, Savills says the most important factor has been the recovery in the international economy.
Dr John McCartney, Director of Research at Savills said: “The US and UK economies have grown by 2.5% and 5.5% respectively over the last year. This, combined with a weakening euro, has led to a significant increase in the number of visitors coming to Ireland from Britain and North America”.
And McCartney expects this trend to continue: “While the Eurozone economy continues to underwhelm, US and UK growth remains strong and will continue to support tourism activity in Ireland and Northern Ireland. This will be aided by a further weakening of the euro as interest rates in the euro area remain low while they are set to start rising again in the UK and America.”
The full report can be viewed here: http://bit.ly/1paUPrx