Dublin's landmark Burlington Hotel for sale at a knockdown €75m
A landmark Dublin hotel, bought by developer Bernard McNamara for €288m in 2007, is up for sale at around a quarter of its boom-time price.
The 500-bedroom Burlington Hotel has been put on the market by receiver Paul McCann of accountancy firm Grant Thonton. Selling agent CBRE expects the Dublin landmark to fetch between €65m and €75m.
Paul Collins of CBRE told the Irish Independent that international buyers were most likely to lead the charge for the four-star property, which is situated on 3.8 acres. Potential buyers from UK, the US and the Middle East are expected to be interested.
He said it was likely to be late October or November before bids were formally received and that the hotel could change hands before Christmas. He said he'd be surprised if an international hotel brand wasn't among the ultimate operators.
The Burlington, which opened in 1972 and is affectionately known as the 'Burlo', is the largest hotel in Dublin city centre. It eclipses Bewleys hotel in Ballsbridge, which has 300 rooms and the Gresham on O'Connell Street, which has 288.
The landmark hotel was one of the country's most expensive pieces of property when it was bought by Mr McNamara from the Jurys Doyle group at the top of the bubble. That sale was also handled by CBRE.
A joint venture between Mr McNamara and Bank of Scotland (Ireland) was granted planning permission in 2008 for a €1bn redevelopment that included the Burlington site. Mr McNamara had also bought adjoining land from German insurer Allianz.
Bank of Scotland did not comment yesterday on the sale.
The hotel briefly closed in January 2008, but it subsequently reopened.
It is estimated to be generating between €5m and €6m a year in earnings before interest, tax, depreciation and amortisation, which is a standard measure to identify the financial health of a business.
Mr Collins said that Dublin hotels had been performing well over the past two years, with sales-per-available-room having increased every month in the past 23 months. The Burlington currently has an occupancy rate of about 72pc.
But some well-informed sources believe CBRE will struggle to sell the Burlington for the asking price. They reckon a more realistic price would be between €40m and €50m.
"It needs about €10m spent on it," said one source.
While some rooms have been upgraded recently, as many as 300 probably still need to be refurbished. That could cost as much as €10,000 per room.
Mr McNamara resigned from his main construction firm in early 2010. He had been ordered by the High Court to pay €62.5m to investors under a personal guarantee he had given on money borrowed by one of his companies, Donatex. The firm had borrowed €98m to help fund the purchase of the Irish Glass Bottle Site in Dublin for €412m.
The court had been told that Mr McNamara, once one of the country's wealthiest people, was no longer a person of significant net worth.
The receiver was appointed to the Burlington Hotel earlier his year by Lloyds, which now owns Bank of Scotland. It also had receivers appointed to other properties bought by Mr McNamara, who owes Bank of Scotland about €200m.
Source: Irish Independent