The sale of the Gresham is expected to help make 2016 a bumper year for hotel deals
Hotel sales may top 2015, during which a record 63 properties worth over €700 million changed hands.
THE SALE OF valuable properties such as the Gresham is expected to make 2016 a near record year for hotel sales, it has been claimed.
According to property group CBRE, in the first half of the year 29 properties worth a combined total of €136 million changed hands.
The deals concluded during the six month period were almost on a par with 2006 in terms of volume. During that year, the last before the property crash began to kick in, 32 hotels were sold.
CBRE said that it expects the value of deals to soar in the second half of 2016, adding that it may even eclipse 2015, when 63 hotels totalling €710 million were bought and sold.
Lisa Keogh at CBRE Hotels Ireland said that following an “exceptionally busy” year in 2015, transactional activity has remained strong in the first half of 2016.
Strong performance
“With as much as €500 million of hotel sales currently in negotiations, we are now expecting annual transaction volumes in this sector to meet, if not exceed, last years record performance,” she said.
CBRE’s report on the property market said that the volume of hotel sales during the first half of the year was “considerably higher” than had been anticipated.
It added that this was particularly apparent “when you consider that it excludes some of the larger transactions that have dominated the headlines in the last few months including the four star Gresham Hotel in Dublin city centre, the Doubletree in Dublin 4 and the Lyrath Estate in Kilkenny, all of which are now at advanced bidder stage but have yet to conclude”.
Some of the deals mentioned, such as the sale of Gresham hotel, are expected to conclude in the coming months. It has been reported that the Gresham has attracted final bids worth as much as €85 million.
Exterior of the Gresham Hotel on Dublin's O'Connell Street
More sales
CBRE added that, with many of the expected prices for hotel assets in the first half of the year having been “comfortably” exceeded, “we expect to see more hotel properties being launched for sale around the country over the course of the coming months to satisfy buyer appetite”.
The property group noted that there has been “frustration” at the shortage of hotel accommodation in Dublin city centre.
It said that there is potential for hotels with a combined capacity of up to 9,000 rooms to be built in Dublin “if all of the schemes in the planning process are delivered”.
“Against this backdrop, we expect to see a number of sites that have the benefit of planning permission for hotel projects to be offered for sale over the coming months,” it said, referencing several companies such as Irish hotel group Dalata, which recently paid €8.1 million for a site in Dublin 8 that has planning permission for a new 137 bed hotel.
