€200m hotel sales bonanza as market set to surge ‘We expect to see significant improvement in this in 2018’
FOUR hotels with a combined value of just under €199m have changed hands so far this year, according to the latest report on investment activity in the sector from CBRE Ireland.
Taken together, the value of the sales completed to the end of March equate to almost half the volume of spending on hotels recorded for the whole of 2017.
The four hotel sales concluded in the first quarter were: the Citywest Hotel in Dublin, the McWilliam Park Hotel in Claremorris, Co Mayo, the Radisson Blu Hotel in Sligo, and the Hilton Garden Inn Dublin Custom House which was sold as part of the Amaris portfolio.
Arguably, the most significant transaction to have been concluded during the period was the sale of the Citywest Hotel by US private equity giant Pimco to Tetrarch Capital.
The acquisition of the 764room hotel was supported by a €60m loan from Starwood, a Guernsey-domiciled investment company.
Starwood has also provided an additional €9m loan to finance the conversion of 80 aparthotel units into 84 residential apartments at Westpark Apartments.
The six apartment blocks are adjacent to the golf course at Citywest Hotel, and the redevelopment is due for completion by October 2019.
The hotel and convention centre were developed between 1990 and 2009, and, since Tetrarch Capital’s involvement began in 2014, the hotel has undergone an €11m investment programme, which has seen common areas and rooms for guests upgraded.
“Although there were only four hotel sales completed in the first three months, the spend was very healthy with almost €199m transacted,” said Lisa Keogh of CBRE’s ho- tels team. “Following a year in which transactional activity in the hotel sector was constrained by a shortage of product, particularly in the Dublin market, we expect to see significant improvement in this situation in 2018 with several high-profile hotel properties expected to be offered for sale over the next few months.
“Some of these sales will have been fast-tracked by capital gains tax waiver scheme changes announced in last autumn’s Budget, whereby assets purchased after 2011, that originally had to be held for a seven-year period in order to trigger a capital gains tax waiver, can now be sold after a four-year hold period.”