2015 Sees Significant Surge In Hotel Investment
Belfast, November 2nd 2015 – The Hotel sector in Northern Ireland has witnessed a huge rise in activity throughout 2015 according to commercial property firm CBRE. To date this year, there have been nine hotel transactions totalling £67.36 million.
In contrast, only 3 hotels with a combined value of almost £5 million were sold during 2014, including the Tower Hotel Derry for £4.4 million. The surge this year has been in part due to the sale of some distressed assets, however according to CBRE the uptake in activity is due to buyers confidence.
This year US buyers have accounted for 44% of all transactions by value, which included the five star luxury Lough Erne Resort and Jury’s Inn (part of a portfolio sale), while Southern Irish purchasers represented 47% with the balance of 9% of investment value by parties based in Northern Irish. At present there are a limited number of hotels on the market, with new and existing hoteliers actively seeking to enter and expand within the Belfast market.
Across Belfast, many hotel developments have been reported in recent months. The most high profile of these includes the Scottish Mutual building, Windsor House and Lagan House all to be converted by local established hoteliers to provide high quality accommodation.
Increased tourism in Northern Ireland has raised the profile of hotels as an investment class. In addition to new routes from the Belfast International and George Best City airports, one off tourist-related activity such as the Irish Open Golf and the continued success of Titanic Belfast have generated greater number of tourists. Further demand will also come as a result of the 4,000 square meter expansion of the Belfast Waterfront Exhibition and Conference Centre and the 2019 British Open Golf at Royal Portrush.
Hotel activity in 2015 has been extremely encouraging. Sales include the Lough Erne Resort, Holiday Inn Belfast, Fitzwilliam Hotel, Jury’s Inn Portfolio, Crescent Townhouse, Ramada Portrush, The York Portstewart, Belmont Hotel & Kilmorey Arms Hotel. Not to mention the acquisition of various development sites where we are expecting new exciting hotels in Belfast.
Statistics show encouraging levels of growth in both occupancy and average daily rate. However, there is a significant pipeline of new hotels planned for Belfast - based on our research a potential pipeline of approx. 3,900 additional rooms, which if developed would more than double the current room stock in the city. While we believe there is demand for an extra 1,000 to 1,500 new rooms in the city over the next 3 to 5 years, we would be concerned if all in the pipeline were built out.
The current stock in Belfast is well-serviced with budget hotels whilst the majority of the pipeline are four-star hotels.
These new four-star hotels are critical for Belfast, so the city can attract and service large conferences at the extended Waterfront Hall.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 160 employees and offering a full range of property services including property sales and acquisitions; leasing and management; investment; corporate services; debt advisory; project management; consultancy; business rates and compulsory purchase; valuations and research. Please visit our website at www.cbre.ie or www.cbre.co.uk/ni.