Dalata agrees €65m sale & leaseback of Dublin hotel with Deka

Dalata Hotel Group has agreed the sale and leaseback of its Clayton Hotel Charlemont in Dublin, Ireland, to Deka Immobilien for €65 mln.

The transaction is expected to be completed by the end of April 2020.

The hotel will be let on a new FRI (fully repairing and insuring) lease for a 35-year term. The agreed initial rent for the property is €3.05 mln per annum and will be subject to five yearly rent reviews, index-linked to the Consumer Price Index.

As part of the agreement, Dalata will complete at its cost, the final part of the hotel development, which will see the conversion of 38 Charlemont Street into three additional Clayton bedrooms and a Red Bean Roastery Café. These works are expected to be completed in 2020 and will result in no change to the property rent.

The Clayton Hotel Charlemont is a prime 4-star hotel, excellently located, overlooking the Grand Canal, with entrances on Charlemont Street and Charlemont Mall. The hotel currently contains 187 air-conditioned bedrooms, a bar and restaurant, a fitness suite and extensive meeting room facilities. Dalata purchased the site in February 2016 and commenced construction in late 2016. The hotel commenced operations in November 2018 and to date the Company has invested €41.6 million into the purchase of the site and construction of the hotel.

The hotel contributed €4.3 mln to Dalata’s EBITDAR in 2019, its first full year of operation. It was valued at €77.4 mln on 31st December 2019 on the basis of Dalata owning and operating the asset and therefore retaining all earnings generated at the hotel.

The consideration of €65 mln is reflected in the contract by a purchase price of €61.95 mln and a rent-free period of one year, equating to €3.05 mln. The proceeds of the transaction will be retained as cash in the company to fortify its financial resources during the coronavirus crisis.

Dermot Crowley, deputy Chief Executive Business Development & Finance said: ‘We commenced work on this transaction in advance of the Covid-19 crisis. Completing a transaction such as this despite the onset of the crisis demonstrates the commitment of both Deka and Dalata to this partnership and their long-term commitments.’
CBRE and Savills advised Deka on the deal.


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