DUBLIN, October 15th , 2019
The hotel market continued to see solid transaction activity in the third quarter of 2019. In the year to date, transaction activity has totalled €221m across twelve hotels, which compares to sales of €79.3m across eight assets in the same time period in 2018.
This continued interest in hotel assets may be in part due the continued growth in the Irish tourism industry. Despite the uncertain global political and economic landscapes, visitors to Ireland exceeded five million at the six months to the end of June, representing an increase of 3.5% on the same period in 2019. In the first half of the year, visitors from the UK accounted for 36% of all trips to Ireland, while visitors from the US and Canada accounted for 22%. When comparing the first half of this year to the same period last year, the number of visitors from the UK has increased slightly by 0.4%. Although the outcome of Brexit is still uncertain, it is important to remember that the governments in both Ireland and the UK have committed to maintaining the Common Travel Area.
Commenting on the market, Isobel Horan, Associate Director, Trading Assets, Cushman & Wakefield, said:
“With a strong performance in the past three months, all indicators suggest that overall activity in 2019 will exceed that of the past two years. This is particularly evident in the luxury end of the market which is strengthening in terms of activity.”
The third quarter of 2019 saw the sale of two hotels, totalling approximately €49m. The Central Hotel, on Dublin’s Exchequer Street, was purchased in a joint venture between Deutsche Finance International, and BCP Capital for a figure close to €40m. The sale of the 3-star city centre asset accounted for the vast majority of transaction activity in the third quarter of the year.
Press Up Entertainment Group expanded their portfolio with the acquisition of Glasson Country House Hotel & Golf Club, Co. Athlone. The 4-star hotel was purchased by the group as a trading asset for approximately €9m.
Transaction activity in the year to date has been largely focused outside of Dublin, which accounted for just 25% of the value of sales in the nine months to the end of September. The East & Midlands region has seen the highest share of activity, 56%, driven largely by the sales of Powerscourt and Druids Glen in Co. Wicklow earlier in the year. Irish buyers have dominated activity in the year to date, accounting for 67% of transaction value. At the same juncture in 2018, they accounted for 22%. That said at the end of the third quarter of 2019, approximately €169m of hotel assets were sale agreed. If these all successfully close by year end this will bring the ratio of international and domestic buyers for the year closer to 50/50.
Development activity continues to be a key feature of the Irish hotel market. The number of rooms under construction nationwide stood at 4,670 at the end of September. A number of new hotels opened in the third quarter including the Hendrick Hotel, Smithfield, Dublin 7 which opened in July, and the 300-bed Marlin Hotel, Dublin 2, in August.
Dublin continues to be the focus of construction activity, accounting for 87% of development activity. New builds continue to dominate in terms of construction activity, accounting for 70%. New builds are evident in not only Dublin, but Cork and Galway also where two hotels, both to be named The Dean, are under construction for Press Up Entertainment. 20% of the rooms currently under construction are due to be delivered to the market by the end of the year. Two projects of note, which are due for completion imminently, are Hyatt Centric, in the Liberties, Dublin 8 and The Moxy Dublin, Dublin 1.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.ie or follow @CushWakeIRL on Twitter.
