GRAFTON, the Woodies DIY group, has agreed to buy a Holiday Inns hotel for £6.5 million in a sale and lease back arrangement. The 92-bedroom hotel being built at Pearse Street, Dublin will be leased back to Cristeeg Catering, a related company of H.I. Virgin Resorts (HIVR) which is building the hotel.

Cristeeg will operate the hotel, scheduled for completion in August 1997, under a 35-year lease. Grafton will receive an annual rent of £400,000 which will be reviewed every five years.

Grafton has an option to force HIVR to buy-back the hotel at any time after its completion.