CORK INTERNATIONAL Airport Hotel, another distressed property investment held by the developer Bernard McNamara, is to be offered for sale at a substantial discount on the cost of building the four-star facility in 2007.
News of the planned sale of the hotel beside the airport terminal comes in the same week as contracts have been exchanged on the sale of two Dublin bank branches originally bought by McNamara for his “personal pension fund”.
An overseas buyer has agreed to pay about €7.5 million for the high-profile Bank of Ireland building at the junction of St Stephen’s Green and Merrion Row and another branch on the city quays.
McNamara has been one of the most significant casualties of the property crash with overall debts of about €1.5 billion.
Tom Barrett of selling agent Savills is guiding €4,750,000 for the 145-bedroom Cork hotel which cost in excess of €30 million to develop and was funded by Bank of Scotland.
It is being sold on the instructions of receiver Paul McCann of Grant Thornton.
The hotel has been managed since May 2009 by Tifco Hotels, which has agreed to pass on this responsibility to new owners if they choose to operate it.
Barrett said yesterday that the levels of trade and profitability at the hotel had grown in recent years and there was obvious potential to build the business further.
“This is an excellent opportunity for hotel operators and investors to acquire a top-class hotel with a good business record and even better results to come,” he said.
Unusually, the hotel has an aviation theme running through much of the public areas. The overall building designed by German architect Henrik Frischgesell resembles a giant aircraft from the air, while the fit-out includes aeronautical memorabilia and a Pullman lounge with 10 first-class, airline-style seats.
There is also the “Hairport” hair salon.
Other facilities include a bar, lounge, restaurants, sandwich bar and bakery as well as conference and banqueting rooms to cater for up to 320 people. There are 10 meeting rooms.
The overall site extends to 2.79 acres which includes a surface car park with 160 spaces. The local authority rates bill in the current year is €291,525.
Cork International Airport Hotel was just one of a string of hotels McNamara got involved in during the property boom. The others included the Shelbourne, Burlington, Conrad, Tara Towers, Montrose, Ormond and Mercer hotels in Dublin, as well as Parknasilla in Kerry, Radisson in Galway and the Kilkenny Ormond.
Agent Knight Frank is handling the sale of the two bank branches for receivers Farrell Grant Sparks who are acting for Nama.
The bank branch virtually opposite the Shelbourne Hotel is understood to have made slightly over the €6.25 million guide price, a long way from the €12 million paid for it near the end of 2006.
The new owner will get a return of around 6.25 per cent after costs compared to McNamara’s net yield of 3.1 per cent.
A strong selling point is that the lease has 19 years to run.
The rent of €404,484 per annum equates to €579 per sq m (€53.85 per sq ft) – considerably more than the going rate for the city centre.
The three-storey building with a two-storey return, all over basement, has 697sq m (7,511sq ft) and carries a “protected building” status.
The second bank branch included in the package, Arran Quay, had a guide price of €1.3 million. The Tudor Gothic building is producing a rent of €111,272 per annum, equating to €288 per sq m (€26.82 per sq ft).
The lease has another nine years to run. At that guide price, the yield works out at about 8.3 per cent.
