German firm poised to buy former Burlington hotel

Blackstone Group, the world's biggest private-equity property investor, is set to sell the former Burlington hotel in Dublin to a German financial firm as it seeks to double its investment in four years.

The New York-based firm is believed to have entered exclusive talks with either DekaBank, which is owned by a group of German savings banks, or DZ Bank's investment arm Union Investment, having put the hotel on the market earlier this year with a price tag of €180 million.

The hotel, rebranded as the DoubleTree by Hilton in 2013, also attracted bids from the Abu Dhabi Investment Authority and US groups Hyatt Hotels and Host Hotels & Resorts, according to industry sources.

On Wednesday morning, Ireland's largest hotel operator, Dalata Hotel Group, said it had entered exclusive talks to lease and operate the hotel with an unnamed party that was negotiating to purchase the property.

Preferred bidder

A spokeswoman for Dalata declined to comment further, while a spokesman for Blackstone also declined to identify the preferred bidder for the asset in a deal being run by property agent Savills. A spokesman for the DekaBank also declined to comment, while Union Investment representatives did not immediately respond to requests for comments after business hours in Frankfurt.

Blackstone was among the first wave of overseas investors to dip into the Irish property market after the crash when it bought the Burlington in 2012 for €67 million. It spent a further €20 million refurbishing the premises.

The hotel is among a number of four-star establishments to be put on the market this month, as room rates and occupancy surge amid rising tourist numbers and a dearth of new hotel openings in recent years. STR Global, a research firm that specialises in hotel statistics, said this week that revenue per available room in the capital rose a 21 per cent in the seven months to July.

Boutique hotels

Earlier this month, Spanish group Riu Hotels & Resorts was picked as preferred bidder for the

Gresham Hotel

on O’Connell Street after bidding more than €90 million. Three boutique Dublin hotels – the Beacon, Morgan and Spencer – are also up for sale, having attracted indicative bids of up to €150 million.

Meanwhile, Jones Lang SaSalle said on Wednesday that its Irish Property Index posted overall returns in the past 12 months of 22.8 per cent, with property values rising 16.2 per cent in the year.