According to the latest Savills Ireland hotels report the dramatic upturn the market experienced in 2012 is continuing with strength in 2013 due to improvement in occupancy and average room rate (ARR).
According to the latest Savills Ireland hotels report the dramatic upturn the market experienced in 2012 is continuing with strength in 2013 due to improvement in occupancy and average room rate (ARR). This growth in market confidence has led to a number of landmark sales and Savills predicts investment volumes could reach €300m in 2013.
Tom Barrett, head of hotels and leisure at Savills Ireland, explains: “Already this year 21 hotels have sold or been agreed totalling €170m. This level of activity is set to continue for the remainder of the year with over €300m worth of transactions expected to take place. Additionally, the expiry of the Hotel Capital Allowances granted in 2005/06 and the limited remaining window to avail of the capital gains tax waiver which runs out on 31st December 2013 should also help increase volumes.”
Notable transactions so far in 2013 according to the firm include Ashford Castle which sold for almost €250k a room, the River Lee Hotel, Cork which sold as an investment property with a yield of just below 8%, and Jurys Inn, Parnell St, Dublin 1 which sold with a yield of 11%. Savills has also agreed sales on Midleton Park, Carlton Atlantic Coast and The Ambassador Hotel.
The Radisson Blu, Cork Clarion IFSC, and Clarion Dublin Airport are all currently on the market with asking prices of €8m, €30m and €10m respectively. Savills has a strong presence in the Cork area bringing four hotels to the market since the start of 2013.
Tom adds: “In terms of buyers, international investors are showing a strong interest in prime city centre hotels and trophy assets located in regional locations. It is also encouraging to see domestic demand return with a strong focus on hotel opportunities outside Dublin. A large portion of hotels being sold are receivership sales. These hotels are now coming to the market at a faster pace and with realistic asking prices. As a result of this and the stronger level of demand for hotel properties, hotels are being sold in a timely manner.”