A new report from Cushman & Wakefield has found that the opening quarter of 2019 welcomed a significant boost in hotel transaction activity. Turnover in the first three months of the year amounted to €106.7m, across six transactions. This compares to just €24m in the same quarter last year and sits just above the five-year quarterly average of approximately €99m.
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.
Of the six hotels which transacted in the first quarter, the most notable was that of the 5-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.
Transaction activity in the opening three months has been largely focused outside of Dublin, with just one sale closing in the city. Sales outside of the capital totalled €94.8m. The East and Midlands accounted for a large proportion of this, with sales in the region totalling €58.3m.
The report shows that 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 extensions and redevelopments will account for 17% and 18% respectively.
Cushman & Wakefield say 52% of the rooms under construction are expected to complete in 2019, with a further 1,143 rooms to be delivered to the market in 2020. These rooms will be delivered across 40 hotels and will be a welcome addition, particularly in Dublin, where occupancy levels and average room rates continue to rise.
There were two hotel completions in the first three months of the year. Aloft Dublin City, a 4-star 202 room hotel opened in Dublin 8, and Avalon House Hotel, a 4-star 30 room boutique hotel opened in Kilkenny.
According to Cushman & Wakefield, "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 5-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."