Hotel PortfolioNearly all of the eight hotels in the Great Southern chain come with sites that are likely to greatly interest developers, says Edel Morgan
The Dublin Airport Authority (DAA) is to sell off its €170 million Great Southern Hotels Group (GSHG) portfolio by tender.
The agent, CB Richard Ellis, has set a deadline for offers on the eight hotels of June 23rd.
There are six four-star and two three-star hotels in the portfolio which represents a total of 1,054 bedrooms and extensive conference, banqueting and leisure facilities.
It is expected that CIÉ, a former owner of the hotel chain, will try to buy back the Galway Great Southern Hotel on Eyre Square to enhance the property development opportunities of its railway station. The hotel fronts a CIÉ freight marshalling yard, 14-acre railway station and bus terminus. The addition of the hotel could bring the value of a mixed-use development on the site to €1.5 billion. However given its central location, it is expected to attract huge interest from the hotel market.
It is also believed CIÉ might make an offer for the Killarney Great Southern Hotel which sits on 12.4 acres, adjoining a rail station. However, the agent is looking at selling some of the this land off as a separate lot with "obvious development potential subject to planning permission".
It is believed that Bernard McNamara and Choice Hotels backed by Paddy Kelly have teamed up to make bids for the hotels.
The DAA, formerly Aer Rianta, which has owned the hotels for a decade, has decided to offload the hotels because of huge financial losses - these reached €6 million at the end of 2005.
The airport hotels at Shannon, Cork and Dublin, the flagship hotel, are the only ones reported to be breaking even.
Dermot Curtin of CB Richard Ellis says these could be of interest to an existing airport hotel operator.
"An international or Irish operator who knows how they work will see it as an opportunity," he said.
Cork Airport comes to the market with planning permission to add 54 bedrooms, as well as further meeting rooms, a restaurant and leisure facilities.
While the Corrib Great Southern Hotel on the Dublin Road in Galway is said to be one of the poorest of the group's hotels in terms of performance, its seven-acre site is expected to attract residential developers.
The Rosslare Great Southern Hotel is on a site of 1.53 hectares.
SIPTU has voiced concern that developers might seek to make money from the lucrative land banks attached to the group's Corrib, Killarney and Parknasilla hotels, and there has been speculation that the hotels might suffer from the development of these sites as a result. Dermot Curtin says they are being sold as going concerns "but after that it is up to the developer what they do".
Parknasilla, regarded as the jewel in the group's crown, has planning permission for the complete renovation of the hotel's public area, as well as a new leisure facility, extra bedrooms and suites, and an additional 67 apartments and holiday homes on extensive grounds.
Another planning permission for 52 apartments, holiday homes and a new golf club house is currently on appeal with An Bord Pleanála and a decision is due shortly.
The hotel stands on around 300 acres with a separate 75-acre site towards Sneem accommodating the hotel's archery and clay pigeon shooting facility.
The agent says there is potential on most of the other sites for further facilities subject to planning permission.
