A new report from Cushman & Wakefield has found that development activity in the Irish hotel market is ramping up, with Dublin predominantly the focus.
The research shows that almost 800 bedrooms were delivered to a market in short supply with increasing occupancy levels and construction completed in 15 hotels during the first nine months of 2018.
A further 2,800 hotel rooms were under construction at the end of September, a 37% rise annually, across 31 hotels. Again, the majority of these rooms are in Dublin, with a mix of aparthotels right through to 5-star hotels in the pipeline.
Furthermore, two-thirds of the rooms under construction comprise new builds, while 19% are in the form of extensions, and the remaining 14%, in hotel redevelopments.
Cushman & Wakefield say the most notable hotel to commence construction during the third quarter was that of a new 7-storey hotel on Ship Street Great, Dublin 8. This hotel will provide 136 bedrooms upon completion towards the end of 2019.
The property experts also say that the limited number of properties being brought to the market for sale over the past year has resulted in a notable slowdown in activity. Investment in Irish hotels amounted to €36.5m in the third quarter, bringing the nine-month total turnover to €79.3m, across just eight transactions. Compared to same period of 2017, a 10% fall in the value of sales was recorded. This excludes any unconventional hotel sales such as company sales, loan sales and refinances.
Furthermore, Cushman & Wakefield say the Irish hotel market continues to witness a drying up of distressed asset sales which characterised the market in the years 2014-2016, with both the volume and value of transactions slowing. Transactions to date this year have been mostly small-sized assets, with no big ticket, €50m+ hotels, for sale on the market.