Brehon Capital buys Jacobs Inn hostel in Dublin for €7m

Investment group Brehon Capital has added to its investment portfolio in Ireland by acquiring the 420-bed Jacobs Inn hostel in central Dublin for about €7 million. The Irish Times has learned that Brehon has acquired the property in partnership with Pimco, a US investment group.

The hostel, which is on Talbot Place near the Busáras bus station, was put up for sale by CBRE and KPMG in the summer as part of Ulster Bank's Nadal portfolio. The hostel was controlled by Basil Good and Richard Evans prior to Ulster Bank taking control of its loans. Company filings show that Ulster Bank appointed a receiver to Whitfield Developments Ltd, the hostel's parent company, in late 2011.

Brehon Capital and Pimco have partnered before on deals. In December 2013, they completed the acquisition of the Ulysses portfolio that was sold by Bank of Scotland (Ireland) for about €155 million. This comprised 25 properties assembled by property developer Liam Carroll. More than half of the vacant space in these properties has now been let – including the decision by UTV to locate its new studios in Macken House – and there has also been a strategy of selective disposals.

Brehon’s acquisition of the Jacobs Inn hostel will surprise many observers, given that the investment group has tended to focus on high-end hotels in Ireland. Its acquisitions have included the Mount Juliet and Mount Wolseley resorts, the five-star Powerscourt (formerly Ritz Carlton) hotel in Enniskerry, the Marker Hotel on Grand Canal Square in Dublin 2 and Citywest in Saggart, Co Dublin.

It is understood the hostel deal does not mark a change in strategy but reflects Brehon’s interest in opportunities across a number of sectors. Brehon and Pimco are believed to have been attracted to Jacobs Inn by the strong trading performance of the hostel this year, its prime city centre location and the purpose-built nature of the property.

No recent financial data on the operation of Jacobs Inn is available. Latest accounts filed by Whitfield date back to 2009. Set up in 2011, Brehon Capital is an Irish-owned private equity firm focused on real estate investment opportunities. In August, Kevin McGillycuddy, managing director of Brehon, told The Irish Times that it had a “pipeline” of €100 million in equity with its various investors ready to be put to work here over 12 to 18 months. Brehon recently appointed Paul Connolly, a financier and business associate of Denis O’Brien, as its chairman.