Dublin, 26th March 2021 - Property consultants CBRE Ireland have today released figures for the volume and value of hotel sales completed in the Irish market during the first three months of 2021. According to the property consultants, in total, 5 hotels sold in Ireland in the first three months of the year for more than €13.5 million between them, compared to only 10 hotel sales in the entire year in 2020 when more than €165 million of hotels traded in the Irish market.
Hotels traded since the beginning of the year were all located in the regions including The Blarney Hotel & Golf Resort and Liss Ard Estate in Cork; the Killaloe Hotel in Clare; the Lansdowne Arms Hotel in Kerry and the Iona Hotel in Rosslare, Co. Wexford.
Dave Murray, Director in CBRE’s Hotels team said, “Encouragingly, since the fourth quarter of 2020, and supported by pricing discounts of 15% to 20% from some vendors, there has been a discernible increase in activity in the hotel sector from a transactional perspective. Where sellers are realistic on pricing, there are opportunities to negotiate deals. In addition to the five sales completed in the first three months of 2021, there is considerable underlying activity in this sector with negotiations now well underway on several hotel assets, which should see a number of further hotel transactions completing over the coming months. Once there is transparency on pricing, we expect to see more momentum in the market - mirroring a trend last witnessed in 2012/2013”.
According to CBRE, alternative deal structures are expected to become increasingly evident in the hotel sector of the market. In addition to an increase in sale and leaseback transactions, which will prove popular considering that they enable hotel owners to release capital and focus on their core business, the property consultants expect to see increased incidence of vendor financing, deferred payments, lease purchase arrangements and ground lease transactions in this sector over the coming months.
While Government wage supports and other stimuli have supported the hotel sector to some degree, CBRE say that the reality is that until such time as the nationwide vaccination programme has been advanced, lockdown eased and international travel permitted, conditions in the hotel sector will remain compromised. It is not a question of ‘if’ the hotel sector will recover, but rather ‘when’ it will recover and this is encouraging hotel purchasers. The market will clearly rebound in time, but the speed of this recovery is totally dependent on the timing of vaccine rollout and lifting of travel restrictions. As was the case last year, provincial hotels (particularly those in coastal locations) are likely to benefit most from an increase in domestic ‘staycation’ business in 2021 whereas cities such as Dublin, which are more dependent on international travel, will take longer to recover.
CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com