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Revaluation decrease of £144m for Irish hotels firm Dalata

Pat McCann

The hotel assets of Dalata, the Irish listed company behind the Maldron and Clayton hotel brands, has been hit by a revaluation decrease of €161m (£144m).

The new figure has emerged as the hotel sector continues to cope with the impacts of the pandemic.

Dalata owns four hotels in Northern Ireland - the Maldron in Belfast city centre, Londonderry and at Belfast International Airport, and a Clayton Hotel in Belfast.

The hotel company confirmed the downward revaluation in its recently published half-year results for 2020. It said the company's property, plant and equipment assets were valued at €1.2bn (£1bn) in June of this year, with valuation losses on property of €161m, a 12% fall since December 2019.

Pat McCann, chief executive of Dalata, said he felt the valuations were conservative.

"The problem with valuations is that they rise and they fall," he said. "Because it is a non-cash item, it is not as big an issue in that sense. Would I like them to remain where they were? Absolutely."

Mr McCann said the valuation, which was carried out by Savills, a real estate agency, is about looking at forward-looking cash flows, potential cash flows as well as any transactions that had occurred in the market.

He said valuations are typically used as leverage for bank debt.

The Dalata CEO added that most hotel valuations would fall due to Covid-19.

"By in large, anyone valuing hotel assets at this point in time would have to take into account where they are with Covid.

"That would be Ireland, UK or Europe or where it is - all hotel assets would fall in line with expected cash flows.

"Some will be different, it depends on the outlook for whatever hotel organisation it is. Some will be a lot more, some will be in or around where we are."

Tom Barrett, director of hotels at Savills, said that valuations typically look at trade - including historical, current and future - comparable evidence of sales, the price per bedroom, alternative use and transactions. It can also vary between regions and the kind of product on offer.

"It's a wide range of metrics that are looked at in terms of valuations," he said.

"Sometimes these vary. Sometimes you have a busy transaction market, sometimes, you don't."

Mr Barrett said that there had been a limited number of transactions in the hotel market, which can affect valuations, and that sentiment was driving things.

Belfast Telegraph