The head of one of Ireland's biggest hotel buyers pointed out this week that too much competition among buyers means that purchasing a hotel in Dublin is no longer a good investment. Speaking at a Crowe Horwath/DTZ hotel industry briefing in Galway, Noel Creedon, head of Cork-based specialist investment firm iNua, said his firm will not buy any properties in the capital despite building up a €20 million fund for hotel acquisitions earlier this year, the Irish Independent is reporting. David O'Connor, a director and shareholder in GM Asset Management which recently bought the South Court hotel in Limerick, echoed his remarks.
A flood of investors eager to capitalize on Ireland's economic and property market recovery have seen hotel prices in the capital climb steadily in the past two years. Several world-famous names have bought into Dublin hotels in this period including Kennedy Wilson, who acquired debt attached to the Shelbourne, and US billionaire John Malone, who was part of the consortium that bought the InterContinental (formerly the Four Seasons). The next major Dublin hotel to go up for sale is the Gresham on Dublin's O'Connell street.
There is still "exceptional value" to be found in hotel purchases outside of Dublin, Creedon told the paper. INua has bought four outside the capital in the past two years - the Radisson in Limerick, the Radisson in Little Island, Kerry's Muckross Park (previously owned by Jackie Lavin and Bill Cullen) and the Hibernian in Kilkenny for a combined spend of €32 million. They would cost over €100 million to build from scratch, Creedon said.