Following a record year in 2016 for the Irish hotel market, transaction volumes for the opening half of 2017 have returned to more normal levels after a slowdown in sell-offs brought about by forced sales and receiverships.
This is according to an analysis of the sector by Cushman & Wakefield which reports that 19 hotels worth a combined €76.8 million were transacted in the six months to June 2017. Transaction figures for the same period in 2016 came in at €140 million and at €231 million in 2015.
The biggest sale in the first half of 2017 was the Mount Wolseley Hotel, Spa & Golf Resort in Co Carlow which sold for €14 million.
Most of the activity was recorded in the second quarter. “A notable feature is the growing number of hotels sold off-market,” according to the report. “Seven out of the 19 hotels sold in the first half transacted off-market, compared to just two in the same period in 2016.
“The market has also seen an increase in the share of smaller hotels transacting, with hotels under €10 million in value accounting for 95 per cent of the number of hotels sold.”
Luxury hotels
Sales of high-end hotels have fallen dramatically. There were no sales of five-star hotels in the first half of 2017 and just four four-star hotels transacted, compared to 14 for the same period in 2016. In contrast, sales of two-star hotels accounted for 24 per cent of the market compared to just 0.5 per cent a year earlier.
Another interesting feature of the market is that investment in hotels outside of Dublin is rising – just four hotels in the capital changed hands in the first half of 2017 accounting for just 27 per cent of the spend.
Looking ahead, this suggests that there will be a busy end to the hotels market this year, given the number of hotels under active negotiation and those due to be launched for sale soon.
Transaction volumes will be boosted if sales are completed for the Gibson Hotel in Dublin 1 (guiding €87 million) and Carton House Hotel in Maynooth, Co Kildare (guiding €60 million).
Meanwhile, the report suggests there are 1,250 new hotel rooms under construction across Ireland – a 17 per cent increase on the previous quarter. New-builds account for 61 per cent of this total, 21 per cent comprise rooms in extensions to existing hotels and the remaining 18 per cent are in redevelopments.
"The vast majority of the rooms under construction are in Dublin," according to the agent. "Three significant new hotels commenced construction in Dublin during the first six months of the year. These include 206 bedrooms in the new seven-storey Marlin Aparthotel at 22/23 Aungier Street; 181 bedrooms in the Clayton Hotel at Charlemont Street in Dublin 2, and the 137-bedroom Maldron Hotel on Kevin Street in Dublin 8."
