Businessman Mr Seán Quinn's building materials and hotel group yesterday sealed the biggest-ever property deal in the Czech Republic with the €145 million purchase of the Hilton Prague hotel in the country's capital. Barry O'Halloran reports.
The purchase marks the start of a €1 billion spending spree that will see the Quinn Group investing in similar properties outside the State. The business already owns nine hotels, including the Slieve Russell in Co Cavan.
The Cavan and Fermanagh-based group bought the 788-room five-star property and the smaller 226-room Ibis Karlin Hotel from a privately-held US real estate company, Highbridge, and a Deutsche Bank investment fund. Estate agents Jones Lang LaSalle confirmed last night that the purchase price was €145 million.
Hilton will continue to manage the hotel in return for a fee from its profits. A Quinn Group spokesman said last night that it had no plans for the premises apart from a number of small improvements.
The deal is similar to one that the group struck last year with the Six Continents group for the Grand Plaza Hotel in Cambridge in the UK. The company's spokesman pointed out that Mr Quinn signalled at the time that the business was preparing to embark on a major property acquisition programme.
"He (Mr Quinn) is on record as saying that we would be spending substantial amounts of money on investments like this," he said. "He talked about €1 billion at the time. This is the first step on that road."
The spokesman indicated that Quinn was likely to concentrate its acquisition efforts outside the State. "Our view at this point in time is that there is more value to be found abroad," he said.
He said the key attractions of the Hilton Prague were that the Czech Republic's economy was growing and the fact that it is one of 10 eastern European countries set to join the EU next May. He added that at the same time, the "international situation has improved an awful lot".
Jones Lang LaSalle yesterday said that Prague is one of the most attractive hotel markets in eastern and central Europe. It predicted that the Czech Republic's entry to the EU would drive an increase in the city's property values.
Late last year, Quinn's financial services arm bought a 20 per cent share of NCB Stockbrokers. At the same time, it emerged that the group as a whole expected to make a profit of €150 million in 2003. Along with hotels and pubs, the group is the second biggest cement manufacturer in the Republic and operates life assurance and general insurance businesses.
Another Irish property investor, Shelbourne Development Ltd, confirmed yesterday that it has agreed to buy the landmark Lloyd's building in the City of London for an estimated £245 million sterling (€352 million) from German investment fund, Deka.
The deal will be completed in February.
