The highly profitable Trinity Capital Hotel on Dublin's Pearse Street is to be offered for sale on the international market following a sustained pick up in the hotel business generally in the city.
Paul Collins of CBRE Hotels is guiding between €30 million and €35 million for the four-star hotel, which is understood to have made profits of between €2.5 and €3 million last year.
The hotel is owned by brothers Liam and Des O’Dwyer whose hotel and pub group, Toji Holdings, has had net debts of around €116 million transferred to Nama.
Sharp recovery
A larger grouping of pubs owned by the brothers was broken up in 2009 when a bank receiver was appointed to three of them, Café en Seine, The George and Howl at the Moon.
The 195-bedroom Trinity Capital Hotel opposite Trinity College is almost certain to be acquired by overseas interests just like the three other city hotels sold in past 14 months.
The 138-bedroom Morrison Hotel on Ormond Quay was sold to Russia's richest woman, Elena Baturina, for €22 million; the 501-bedroom Burlington was acquired by US private equity giant Blackstone for €67 million, while the 185-bedroom Marker Hotel and 84 apartments went to Swiss-owned Midwest Holdings and Brehon Capital for €30 million.
The strong overseas interest in the city hotel market has been triggered by a sharp recovery in business – occupancy rates are averaging between 75 and 85 per cent – and increased revenues per room over the past 30 months.
Unfortunately, the resurgence has been of little benefit to many provincial hotels or others developed alongside golf clubs during the property boom. Even with the improved trading climate in Dublin city, several more hotels are due to be offered for sale in the coming months to help reduce excessive borrowings by owners enlarging their property portfolios during the bubble.
Fire station
One of the strong selling points for the Trinity Capital Hotel is that a new owner will have the freedom to relaunch the business as part of a top international brand. The Burlington Hotel, for example, is to trade as DoubleTree, part of the Hilton World- wide group, when it has been upgraded at a cost of between €15 million and €20 million.
The Trinity Captal was developed on part of the site of Pearse Street fire station and a number of period houses beside it. It opened for business in 2000 and has a spacious bar and restaurant to accommodate 235 customers, three meeting rooms, fitness centre and a courtyard garden. There is 443sq m (4,768sq ft) of vacant space at ground and basement level within the original fire station. There is also planning permission to provide an additional 52 bedrooms in an adjoining building on Pearse Street which is in separate ownership. New owners will be able to avail of outstanding capital allowances.
Paul Collins says he is expecting “strong worldwide interest” in the hotel not only because it is “highly profitable” but also because there is potential to raise the room rate and add additional bedrooms. There is also scope to rent the vacant space in the original fire station.
