A SUBSTANTIAL HOTEL investment goes on the market in Dublin city centre today when the Jurys Inn at the junction of Parnell Street and Moore Street is offered for sale with a guide price of €23 million.
The three-star hotel is let to the Jurys Inn Group on a long lease, which has another 27 years to run. The lease agreement provides for the five yearly upwards-only rent reviews in line with changes in the Consumer Price Index. The current rent of €2.39 million, due to be reviewed in 2014, equates to an annual income of €9,450 for each of the 253 bedrooms.
Savills valuation of €23 million would give purchasers a net initial yield of 10 per cent after standard costs. Fergus O’Farrell of Savills said he was expecting “significant Irish and overseas interest” in the investment because of the quality of the building and its central location as well as the long lease terms.
Interestingly, the lease is guaranteed by previous owners, the Doyle Hotel Group.
Jurys Inn, which operates 32 hotels in the UK, Ireland and the Czech Republic, was bought for €1.17 billion at the height of the property bubble in 2007 by the company then known as Quinlan Private. A year later it sold a 50 per cent stake to Oman Investment Fund, an investment arm of the Sultanate of Oman.
Royal Bank of Scotland was the lead bank in the acquisition of the hotel chain, along with AIB and Anglo Irish Bank, now trading as Irish Bank Resolution Corporation.
The Jurys Inn on Parnell Street was developed eight years ago by Garret Kelleher’s Shelbourne Developments and was sold to a 19-member syndicate assembled by Davy Private Clients. The strong selling price at the time – €40 million – was in part triggered by the availability of tax relief for investors. Now that those concessions are gone, the group has decided to offload the investment at a lower valuation than originally anticipated.
O’Farrell says that the underlying value of the real estate in this instance “will support the investment value”.
