Shelbourne Hotel sold
The Shelbourne Hotel has
been acquired by US property investment group Kennedy Wilson, which is planning
to invest millions of euro into the business to build on its status as the top
five-star hotel in Dublin.
The acquisition was effected
last night via a pre-pack receivership, with Ernst & Young restructuring
partner Luke Charleton appointed to handle the process.
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Ownership of this prized
asset has switched from Jerry O’Reilly and John Sweeney, the remaining owners
from a consortium that acquired the hotel in 2004. Other members of the
consortium included Bernard McNamara, who was recently declared bankrupt in
Britain.
The receivership has no
impact on the operation of the hotel, with all sums owed to staff, trade
creditors and the Revenue Commissioners to be paid in full by the new owners.
The property will continue to be managed by Marriott International.
Staff and creditors were
briefed this morning about the change of ownership.
In March, Kennedy Wilson
announced that it has acquired loan notes secured by the Shelbourne for $152.4
million (€110 million), with about $74 million of equity invested. This debt
was owed to the former Anglo Irish Bank.
Kennedy Wilson has now taken
full control of the business and is planning to enhance its facilities.
This will include a facelift
for the hotel’s facade, which is considered a “priority project”. Plans are
also being developed to add a hair and beauty salon to its existing spa
facilities, and to refurbish its 19 suites and public areas.
It is also considering
adding a fourth sitting each day to its afternoon tea service due to strong
demand.
The hotel’s 246 bedrooms are
already being upgraded, in a €3 million investment that will conclude in
November.
Stephen Hanley, general
manager of the Shelbourne, said it was “business as usual” for the hotel.
“The management and staff at
the Shelbourne Hotel are delighted to welcome its new owners, Kennedy Wilson,
to this landmark Dublin property, where it is expected that both parties will
work closely on further enhancing and developing the hotel.”
Mr Hanley said the hotel is
trading successfully. In 2013, its revenues rose by 12 per cent to €29 million
while its operating profit increased by 40 per cent to €6.3 million.
Revenues for this year are
expected to be marginally higher at €30 million, which reflects the impact of
revenue lost due to the refurbishment of its bedrooms. Its occupancy is running
at close to 90 per cent of available rooms.
Commenting on the deal,
Peter Collins, managing director of Kennedy Wilson, said: “The successful
completion of this acquisition represents further progress towards our goal of
the building a large-scale and diverse portfolio in the Irish market, including
commercial multi-family, loan purchases and originations, residential and
hotels. We believe there will be continued improvement in the Irish economy,
and we are committed to a long-term position in this market.”
Kennedy Wilson has acquired
a number of high-profile property assets in Ireland over the past year or so.
These include the Stillorgan Shopping Centre in Dublin, the Portmarnock Hotel
and Golf Links for €29 million, and a residential block at Central Park in
Sandyford for €88 million.
On Thursday, the group
announced that it has acquired Elliott loan portfolio from Ulster Bank for €120
million.