THE VALUE OF hotel sales could be close to €1bn by the end of the year.
That’s according to property consultants Savills Ireland, who have released their latest latest commentary on the hotel property market.
Yesterday, we had the news that two landmark properties were bought in Galway and Wexford by the Dalata Hotel Group. It spent €31.7m on the deals.
Savills says that an acceleration of activity in the second half of the year has seen the combined value of transactions surpass previous expectations.
There have been over €350m of hotel sales in the first three quarters of this year, with an estimated €173m of hotel assets on the market right now.
Tom Barrett, Head of Hotels & Leisure at Savills Ireland, said that “it looks certain that the value of transactions will be in excess of €500m this year”.
However, that figure could potentially double if, for example, The Moran & Bewleys hotel group – which own 10 hotels in Ireland and the UK (2,627 rooms) – is sold. Either way, 2014 will be a record year for hotel sales in the current market cycle.
Savills said that this uplift in sales could be driven by portfolio sales of hotel assets. This is something that hasn’t been seen in the Irish market for over a decade.
“With NAMA and Ulster Bank looking to accelerate disposals, portfolio sales have become more commonplace,” they said. “Projects Venue, Crystal and Nadal alone will contain almost 20 Irish hotels in portfolio sales and they are attracting a range of buyers including existing hotel owners/operators, new market entrants and institutional investors with a mix of Irish, UK and US interests competing.”
In net terms, almost 20,000 jobs have been created in the tourism industry since Q1 2012.
While several factors have supported this, including the Gathering, the Wild Atlantic Way and the reduced VAT rate on tourism, Savills says the most important factor has been the recovery in the international economy.
Dr John McCartney, Director of Research at Savills, said that growth in the US and UK economies, combined with a weakening euro, has led to a significant increase in the number of visitors coming to Ireland from Britain and North America.
You can read the full report at this link.
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