There has been a significant increase in the value of hotel transactions during the first quarter of 2019, compared to the same period in 2018.
Turnover in the first three months of the year amounted to €106.7m, across six transactions, as compared to €24m in the same quarter last year. The amount sits slightly above the five year quarterly average for sectoral transactions of approximately €99m.
Of the six hotels which transacted in the first quarter, the most notable was that of the five star Powerscourt Estate in Co. Wicklow. The hotel was sold to the MHL Group for €50m as a trading asset sale. Five star hotel sales accounted for half of the transactions which closed between January and March, with The Heritage Hotel & Spa, Co. Laois and Sheen Falls Lodge, Co. Kerry also transacting.
Irish buyers were active in the market in the opening three months of the year, accounting for four of the six transactions. Singaporean investor Dr. Stanley Quek purchased the remaining two transactions, Sheen Falls Lodge, Kenmare, and Dublin Citi Hotel, Dublin 2, for €17m and €11.9m respectively.
Transaction activity in the opening three months has been largely focused outside of Dublin, with just one sale closing in the city.
Development activity continues to expand at a pace in the hotel market. Over 4,000 rooms were under construction nationally at the end of the first quarter, a record high for this data series, which began in 2015. The majority of these rooms are to be delivered in the capital, 88% overall. New builds remain the key feature, accounting for 64% of rooms to be delivered.
While construction activity will continue to be the focus of the hotel market, the first quarter of the year did see four hotels brought to the market, which should stimulate transaction activity further. The most notable addition is that of the five star Conrad Hotel, Dublin 2, which is guiding €115m. The three others are the Tullamore Court, Co. Offaly, Carna Bay Hotel, Galway, and the Hilton Kilmainham, Dublin 8.
Commenting on the market, Isobel Horan, Associate Director, Trading Assets, Cushman & Wakefield, said: “It is encouraging to see transaction activity increase in the first quarter of 2019, after a somewhat slow 2018. We envision this activity to continue rising with a pipeline of notable assets due to come to the market in the coming months.”