Archer targets Dublin as hotel sales hit €220m

Aparthotels and five-star properties are driving the boom in hospitality sector, writes Fearghal O’Connor

A MAJOR European hotels investor has said it is “actively seeking investments” in Dublin as new figures show hotel transactions totalling €220m in the past three months.

The news comes against the backdrop of Dublin City Council voting to put a limit on the number of hotels in the city.

But the director of portfolio and fund management at Archer Capital, Guy Pasley-Tyler, said the investment firm “believes in the long-term potential of the Dublin hotel market and is actively seeking investments in the city in order to further diversify its portfolio”.

He added: “Its high proportion of international visitation and strong links with the US economy would be complementary to other assets in the portfolio and may enable the market to outperform its peer group over the long term, notwithstanding any short-term challenges.”

Pasley-Tyler made the comments at a joint Crowe and Cushman & Wakefield briefing about the Dublin hotel market.

Archer Capital, which manages a portfolio of high-quality European hotels valued at €2bn, has been linked to an expected €100m-plus acquisition of the Conrad Hotel on Earlsfort Terrace. The briefing also heard that the upsurge in development of aparthotels had marked the most significant structural change in the city’s hotel market in many years.

Aiden Murphy, partner with Crowe, said that over the next three years, 1,400 rooms of this type — almost a third of planned new hotel stock — will be added to the capital’s capacity.

“There are certain factors which are helping to drive the aparthotel market in making them both easier to run and more attractive to a growing number of visitors,” said Murphy.

“The pricing model from aparthotels, especially for longer-term stays, is particularly attractive to the corporate market,” he said.

“Brexit has also seen executives who are normally UK-based working on Brexit-related projects in the capital and requiring longer stay options, and having an aparthotel suite available for a number of weeks or a number of months meets the needs of this market segment.”

The briefing also heard that hotel transaction activity for the three months to the end of September continued to be strong and 2019 remained on target to be ahead of last year.

“Transactions totalled €220m and particularly noteworthy in the market is an emerging trend of five-star/luxury products transacting in the current market,” said Isobel Horan, director of Cushman & Wakefield.

This figure was down by 80pc on 2014 but that was due to the number of distressed sales that occurred that year.