I R I S H H O T E L M A R K E T 29 NOVEMBER 2018
Up to 500m of Hotels could trade in Ireland in 2018. Market Outlook, 2018 2 BOI IRISH HOTEL MARKET
AGENDA Supply Changes Dublin Regional Pipeline New Openings Dublin 2018 & Beyond Transaction Landscape Market Players Brands and Buyers Emerging Deal Structures 3 BOI IRISH HOTEL MARKET
N o. 1 S U P P LY C H A N G E S D U B L I N 4 BOI IRISH HOTEL MARKET
DUBLIN HOTEL SUPPLY EVOLUTION 21,500 6.0% 21,000 The Gibson The Marker The Dean Holiday Inn Express The Address 5.5% 5.0% 20,500 20,000 4.0% 19,500 3.0% 19,000 2.0% 18,500 18,000 1.3% 1.0% 0.3% 1.2% 0.9% 1.0% 17,500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 November Existing Closed Opened Growth % 0.0% 5 BOI IRISH HOTEL MARKET
DUBLIN DEVELOPMENT PIPELINE Bedrooms opening by Quarter 422 rooms opened in 2016 182 rooms opened in 2017 8,000 7,000 6,922 7,614 +7,322 +7,614 1,091 rooms opened in 2018 YTD 373 more rooms to open in 2018 6,000 5,000 4,000 3,829 +5,379 3,500 rooms currently on site 3,000 2,000 1,000 +373 +2,122 7,614 rooms to open by 2022 37% increase in current supply 0 Bedrooms On Site Bedrooms Opening Source: Hotels Research 6 BOI IRISH HOTEL MARKET
DUBLIN NEW SUPPLY BY LOCATION AIRPORT 267 Extensions 725 New Builds Airport Total 992 Total New Bedrooms 6 Schemes CITY CENTRE 899 Extensions 3,985 New Builds Dublin City Centre Total 4,884 Total New Bedrooms 47 Schemes DUBLIN SECONDARY 84 Extensions 1,654 New Builds Dublin Secondary 1,738 Total New Bedrooms 13 Schemes 7 BOI IRISH HOTEL MARKET
N o. 2 N E W O P E N I N G S 2 0 1 8 A N D B E Y O N D 8 BOI IRISH HOTEL MARKET
2018 OPENINGS IVEAGH GARDEN HOTEL MALDRON KEVIN STREET THE DEVLIN 145 Bedrooms Office Conversion 17 Month Build Opened February 2018 137 Bedrooms Brownfield Site 22 Month Build Opened in July 2018 41 Bedrooms New Build 15 Month Build Opened in November 2018 9 BOI IRISH HOTEL MARKET
TO OPEN BY YEAR END 2018 CLAYTON HOTEL CHARLEMONT ALOFT BLACKPITTS Rooms: 187 Opened: November 2018 Rooms: 202 Opening: December 2018 10 BOI IRISH HOTEL MARKET
DUBLIN PIPELINE NEW ON SITE THIS YEAR THE HENDRICK SACKVILLE HOUSE MOXY HAMPTON BY HILTON - RIVER HOUSE Rooms: 147 Estimated completion Date: Q3 2019 Rooms: 158 Estimated completion Date: Q4 2019 Rooms: 249 Estimated completion Date: Q1 2020 KEAVAN S PORT HOTEL - WETHERSPOONS ORMOND LOCKE BY SACO - ZANZIBAR BECKETT LOCKE BY SACO Rooms: 98 Estimated completion Date: Q4 2019 Units: 160 Estimated completion Date: Q3 2020 Units: 214 Estimated completion Date: Q4 2020 11 BOI IRISH HOTEL MARKET
DUBLIN PIPELINE NEW ON SITE THIS YEAR ORMOND HOTEL Rooms: 120 Estimated completion Date: Q1 2020 ANDREWS LANE THEATRE Rooms: 138 Estimated completion Date: Q4 2019 12 BOI IRISH HOTEL MARKET
N o. 3 S U P P LY C H A N G E S R E G I O N A L 13 BOI IRISH HOTEL MARKET
GALWAY - NUMBERS AND PROJECTS IN PLANNING SYSTEM: 647 GRANTED: 429 ON SITE: 35 GRANTED EXTENSIONS: 6 Projects 75 Bedrooms GRANTED NEW DEVELOPMENTS: 5 Projects 354 Bedrooms PRE-PLANNING: 2 Projects 350 Bedrooms Prospect Hill 134 bedrooms Acquired by Paddy McKillen Travelodge Galway 17 bedrooms Completed Park House Hotel 20 bedrooms On Site 14 BOI IRISH HOTEL MARKET
CORK NUMBERS AND PROJECTS IN PLANNING SYSTEM: 1,804 GRANTED: 1,414 ON SITE: 171 GRANTED EXTENSIONS: 5 Projects 253 Bedrooms GRANTED NEW DEVELOPMENTS: 8 Projects 1,161 Bedrooms PRE-PLANNING: 2 Projects 285 Bedrooms Maldron Beasley Street 230 bedrooms (+165) On Site Sullivan s Quay 220 bedrooms Granted Metropole & The M 75 & 228 bedrooms To go on site 2019 15 BOI IRISH HOTEL MARKET
N o. 4 T R A N S A C T I O N L A N D S C A P E 16 BOI IRISH HOTEL MARKET
Transaction volume in Number of Hotels Traded IRELAND TRANSACTION VOLUMES 1,200,000,000 65 63 66 70 1,000,000,000 60 800,000,000 50 600,000,000 32 33 36 40 400,000,000 26 24 30 20 200,000,000 0 10 12 8 2 3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 10 0 Volume No. of Transactions Source: Hotels Research 17 BOI IRISH HOTEL MARKET
2018 TRANSACTIONS - DUBLIN PROJECT TRIDENT PREMIER SUITES BALLSBRIDGE CITYWEST HOTEL - INTERNAL SALE Portfolio of 19 Hotels and Developments SOLD Investment Sale of 49 units SOLD 764 Bedrooms SOLD IBIS HOTEL DUBLIN HILTON DUBLIN AIRPORT HILTON GARDEN INN DUBLIN CUSTOM HOUSE 150 Bedrooms SOLD 166 Bedrooms SOLD 323 Bedrooms SOLD 18 BOI IRISH HOTEL MARKET
2018 TRANSACTIONS - REGIONAL ATHLONE SPRINGS HOTEL CONNEMARA COAST HOTEL RADISSON BLU SLIGO 68 Bedrooms SOLD 141 Bedrooms SOLD 132 Bedrooms SOLD MCWILLIAM PARK HOTEL HERITAGE HOTEL KILLENARD CASTLE OAKS HOUSE HOTEL 103 Bedrooms SOLD 98 Bedrooms SALE AGREED 64 Bedrooms SALE AGREED 19 BOI IRISH HOTEL MARKET
CASE STUDY PROJECT TRIDENT Platform Sale of the Tifco Hotel Group, including 19 assets. Largest ever hotel transaction in Ireland. Full Service Portfolio Crowne Plaza Blanchardstown Crowne Plaza Dundalk Crowne Plaza Dublin Airport Holiday Inn Express Dublin Airport Hilton Kilmainham Developments Hard Rock Dublin (Parliament Hotel Travelodge Townsend Street Travelodge Portfolio Travelodge Swords Travelodge Ballymun Travelodge Phoenix Park Travelodge St Stephen s Green Travelodge Rathmines Travelodge Waterford Travelodge Galway Travelodge Limerick Coonagh Travelodge Limerick Castletroy Travelodge Belfast Travelodge Derry 20 BOI IRISH HOTEL MARKET
Price per Key ( 000 s) Dublin City Yield DUBLIN YIELDS & PRICE PER KEY EVOLUTION 425 The Morrison Burlington Hotel Trinity Capital The Spencer Temple Bar Hotel The Gresham Burlington Hotel Dublin Lifestyle Collection Temple Bar Hotel 8.00% 375 7.50% 325 7.00% 275 6.50% 225 6.00% 175 5.50% 125 2012 2013 2014 2015 2016 2016 2016 2017 2018 5.00% Price per Key (EUR '000s) Dublin City Yields Source: Hotels Research 21 BOI IRISH HOTEL MARKET
SITE SALES THE VALUE OF PLANNING PERMISSIONS Sites sold with Hotel planning permission ZANZIBAR (2016) FPP For: 89 Bedrooms Re-applied For: 165 Bedrooms Price per key: 115k Revised price per key: 62k BENBURB STREET (2018) FPP For: 96 bedrooms Re-applied For: 130 bedrooms Price per key: 94k Revised price per key: 69k Sites sold without Hotel planning permission ANDREWS LANE THEATRE (2016) ABBEY STREET UPPER (2017) Lapsed planning Price per Key: 28k Lapsed planning Price per key: 43k 22 BOI IRISH HOTEL MARKET
N o. 5 M A R K E T P L AY E R S B R A N D A N D B U Y E R S 23 BOI IRISH HOTEL MARKET
TWO YEARS AGO BRANDS CONSIDERING DUBLIN 24 BOI IRISH HOTEL MARKET
NOW NEW STILL LOOKING CONFIRMED
BUYER LANDSCAPE International International International International International National International National National 27 BOI IRISH HOTEL MARKET
N o. 6 E M E R G I N G D E A L S T R U C T U R E S 28 BOI IRISH HOTEL MARKET
EMERGING DEAL STRUCTURES 1 2 3 SALE AND LEASEBACK Term: 25 years + Rents: 55% - 65% of NOI Rent Cover: 1.5 to 1.8 times Reviews: RPI or CPI with cap and collar Covenant Strength: Parent guarantee/ rent deposit/ bank guarantee/ insurance bond Other conditions: Provision of financial information/ obligation to put FF&E fund in place London yields: 4% + INCOME LEASES Term: 40 years + Rents: 10% - 20% of EBITDAR Reviews: RPI or CPI with cap and collar Buyback: Buyback freehold at expiry for 1 London yields: +/- 3% GROUND LEASES Term: 100 years + Rents: 10% - 20% of EBITDAR Reviews: RPI or CPI with cap and collar Buyback: Possible provision for lessee to buyback freehold interest London yields: +/- 2% 29 BOI IRISH HOTEL MARKET
Hotel activity in Ireland to exceed 2018 levels in the coming year. Market Outlook, 2019 30 BOI IRISH HOTEL MARKET
Thank You. CONTACT US JOHN HUGHES Director +353 1 618 5538 john.hughes@cbre.com DEBBIE HUGGER Analyst +353 1 618 5737 debbie.hugger@cbre.com