Ireland Sees Its First–and Costliest–Hotel Transaction in Two Years
- Apr 29, 2010
April 29, 2010
By Barbra Murray, Contributing Editor
In a cash transaction that marks the first hotel sale in Ireland in two years, the 73-room Chief O’Neill’s Hotel has just come under the ownership of an international company seeking entry into the city. Although the final $11.3 million price tag for Chief O’Neill’s was significantly lower than the $18.5 million asking price and the approximately $23 million seller Laurence Byrne paid for it in 2006, the property still commanded the highest price for a hotel in Ireland in two years.
Commercial real estate services firm CBRE Hotels marketed Chief O’Neill’s on behalf of the seller. The 63,000-square-foot, six-story hotel, which has sat vacant for the last year in the Smithfield Village, opened its doors less than 10 years ago. Its amenities include a restaurant, as well as conference and banquet facilities. The property also provides a certain upside; a vacant retail space and the potential to expand to 117 guestrooms will place the hotel in a prime position to attract guests and accommodate demand when Dublin’s hotel market recovers.
However, that eagerly awaited recovery is not exactly within sight. According to statistics released by hotel research firm STR Global, the average RevPAR for Dublin hotels plummeted 22.8 percent in 2009. And looking ahead for 2010, while certain European hotel markets are expected to show some level of improvement this year, according to a report by real estate services firm Jones Lang LaSalle Hotels, Dublin will likely continue to be overburdened by challenging economic conditions. Along with Prague, Budapest and St. Petersburg, the city has one of the highest risk profiles.
Despite the grim outlook for the Dublin hotel market’s immediate future, the long-term view appears brighter due to a handful of fundamentals. As CBRE Hotels noted in its marketing package, the projected net increase in guestroom supply is limited, as a number of existing hotels are to be redeveloped into other property types. Additionally, Dublin’s city council recently gave the green light for a multi-million-dollar investment in Smithfield Plaza.