Burlington Hotel on market for one-quarter of 2007 price - The Irish Times - Wed, Aug 29, 2012

DUBLIN’S BURLINGTON Hotel, bought by property developer Bernard McNamara at the peak of the property boom in 2007 for €288 million, is back on the market with a guide price of €65-€75 million.

Agent CBRE Hotels is handling the sale on the instructions of Paul McCann of Grant Thornton, who was appointed receiver by Bank of Scotland (Ireland). The Lloyds-owned bank is using loans specialist Certus to run down its banking operation in the Republic.

Mr McNamara has been one of the biggest casualties of the property crash with overall debts of €1.5 billion.

The Burlington is the second largest hotel in Ireland after Citywest in Co Dublin, with 501 bedrooms and extensive conference and banqueting facilities on a 3.8-acre site on the city’s south side.

The hotel is understood to have made profits of between €5 million and €6 million last year when the room occupancy rate was running at 70-75 per cent. A sizeable proportion of the profits come from the extensive banqueting hall, which can accommodate 1,500 guests.

Paul Collins, of CBRE Hotels, said yesterday there had been a remarkable recovery in the Dublin hotel market, and city hotels were now among the best-performing in Europe.

After buying the Burlington, Mr McNamara planned to boost the overall value of the site to €1 billion by developing a mainly office and retail complex extending to 33,300sq m. Shortly afterwards the property market bombed.

Hotel experts expect the Burlington will be of interest to the investment partners of several international hotel chains such as the Sheraton, Hilton, Hyatt, Marriott and Crowne Plaza. The major hotel groups seldom acquire hotels, preferring to manage them under their own brands for investment partners.

The €65-€75 million being sought for the Burlington equates to a valuation of about €130,000 to €150,000 per room. In the recent sale of the Morrison Hotel on Dublin’s Ormond Quay to a wealthy Russian businesswoman for €22 million, each of the 138 bedrooms cost just over €159,000.

One of the lowest valuations in recent years – €76,142 per room – was paid for the Four Seasons Hotel in Ballsbridge in June 2011. The sale to a private UK property company, London and Regional, for €15 million – a quarter of what the hotel cost to develop – reflected the fact that the then unprofitable Four Seasons had a long-term management agreement with the international company and the hotel pays an annual ground rent of €700,000 to the RDS.

via irishtimes.com