Dublin’s hotel market continues to attract innovators and first-time investors, confident that the Irish capital will continue to thrive.
International investors have accounted for two thirds of investment volumes in 2019, according to figures collated by CBRE which reckon around EUR600m of assets changed hands. And significantly, many of the major transactions involve investors new to the Irish market.
Significant deals include the EUR134m sale of the Marker hotel, bought by Deka Immobilien – itself not a stranger to investing in Ireland. The property will be branded under Minor International’s Anantara brand, as one of its first steps into Europe.
US owner Park Hotels disposed of the Conrad, selling the property for EUR116m to
Market newcomer Archer Hotel Capital. The deal, worth just over EUR700,000 per key, represents a new high for the city. Also arriving in the market was Deutsche Finance International, which acquired Portmarnock Hotel & Golf Links for EUR50m, while Canadian newcomer Northland Properties paid EUR40m for the Central Hotel.
Also on the way to the city is German brand Ruby, which is being backed by InfraRed Capital Partners in developing a 278 room hotel. Meanwhile Austrian investor Thomas Roeggla has doubled down on his commitment to Irish hotels. In recent years, he has assembled a portfolio of Irish hotels, and during 2019 bought Harvey’s Point hotel in Donegal and the Plaza and Tallaght Cross hotels in west Dublin. The Tallacht, which was built a decade ago, never opened and fell into the hands of NAMA. Roeggla says the combined spend on buying and refitting the three properties will be around EUR60m.
The city is also set to be the testbed for a new dual-use project from co-living brand The Collective. The London-based company is reported to be planning a 144 room hotel with 69 co-living units above. Designs for Collective Fumbally, an eight-storey block in the Liberties area of the city, have been submitted to planners.
In addition to the EUR600m of assets traded, a further EUR100m of development sites were also bought, with buyers including Whitbread, which in December secured its fourth hotel development site in the city. Its Dublin pipeline is now more than 630 rooms, with a long term target of 2,500 rooms across the city.
Looking ahead, CBRE’s Dan O’Connor predicted: “Canadian money is one to watch in 2020 in our view – it is a capital pool which has already quietly invested around €12 billion in real estate across Europe since 2017.”
New openings are depressing performance in the short term, with 2019 revpar down around 3% as over 1,200 new rooms were delivered to the market, with brands including Hyatt Centric and Moxy launching in the city. For 2020, the openings continue, adding 15% to capacity with 3,600 more rooms open before the end of the year. However, with a strong events calendar, and an expectation that Brexit uncertainty will wear off, agents remain optimistic that hotel performance will bear up.
HA Perspective [by Chris Bown]: Seemingly oblivious to the shenanigans further north, as to whether and where Brexit will demand a border wall, the Dublin market continues apace – drawing in ever more international capital.
Not unlike many other European cities, there is a scary volume of new hotel space coming over the hill. Will the ever-increasing volume of visitors be enough to fill those rooms? Time will tell – but in the meantime, the lure of the Emerald Isle seems to be seducing all manner of international investors, keen to get into Europe while dealing with a bunch of folk who speak their language, sort of.