Irish hotel transactions set to top €1bn this year

Two major hotel deals accounted for most of the activity. The sale of a majority stake in eight hotels in Paddy McKillen Jr’s Dean Hotel Group had an enterprise value of about €350m.

The sale of the Shelbourne Hotel to Archer Hotel Capital was reported at €250m. Spend in the first three months of the year exceeded total annual volumes for 2023.

Dave Murray, senior director of hotels at CBRE Ireland, said the full year outturn for 2024 looks promising, with annual hotel spend expected to achieve in the region of €1bn.

There are a number of hotels on the market at the moment, including the four-star Slieve Russell in Co Cavan which has a €35m price tag, and Mount Juliet in Co Kilkenny with a €45m guide.

Due to the strong trading performance of Dublin hotels, the market continues to appeal to purchasers and it was particularly strong in 2023.

According to data from STR, in 2023 Dublin achieved the highest hotel occupancy rate (83pc) out of 35 European markets. Dublin also ranked seventh highest in terms of revenue per available room.

While operational performance was softer in the first quarter of 2024, this is expected to pick up as the year continues, considering demand, macro indicators and the number of largescale events due to take place in Ireland, including the Europa League final at the Aviva Stadium in May and the Taylor Swift concert in Dublin in June.

CBRE’s 2024 European Hotel Investor Intentions Survey showed strong investor interest in European hotels.

More than 90pc of respondents reported intentions to maintain or increase their capital allocation to hotels in 2024. The preferred strategy for investors is a value-add approach, while opportunistic strategies are also in focus.

Ireland placed eighth in terms of desired location for investment and Dublin ranked seventh among cities expected to see strong levels of investment interest in 2024.

Several hotels have recently opened in Ireland including The Leinster on Lower Mount St which opened last month, and the first Premier Inn in Cork in January.