The Ballsbridge hotel is expected to sell for around €30 million, writes JACK FAGAN

THE CBRE property consultancy handling the sale of the Four Seasons Hotel in Ballsbridge, Dublin 4, is targeting hotel investment funds in Europe and the US as well as overseas owners of luxury hotels.

It is thought highly unlikely that an Irish buyer can be found because of the economic downturn and the banking crisis.

Although no guide price is being quoted at this stage for the five-star, 197-bedroom hotel, market sources suggest that the owners would be happy to sell the property for around €30 million.

Even if that figure is achieved, it will fall well short of the €50 million loan advanced by Anglo Irish Bank to Nollaig Partnership, the 18-strong syndicate that funded the hotel a decade ago.

Paul Collins, CBRE’s specialist in the hotel industry, is overseeing an international marketing campaign to find a purchaser for the hotel which had losses of almost €3 million in 2009.

Trading in the current year has apparently picked up in line with a new international study of the hotel industry which shows that room occupancy rates in Dublin rose to 80.4 per cent in September-the best improvement in two years.

Mr Collins refused to comment on CBRE’s role in handling the sale of the Dublin hotel. However, while investment funds would obviously be reassured that Four Seasons has a long-term management contract to run the hotel, some of the owners of luxury hotels being approached by CBRE might well want to operate the hotel themselves.

Either way, potential buyers will be told that the prospects for the hotel have improved considerably following the opening of the Convention Centre Dublin and the nearby Aviva Stadium.

Although the terms of the management contract have not been disclosed, leading hotel brands like Four Seasons generally look for 3 per cent of turnover and 10 per cent of the profits.

They also qualify for special fees for reservations, sales and marketing.

A range of international hotel brands which moved into Ireland during the boom years left just as quickly once the business went into decline.

In some cases, particularly outside Dublin, the hotel chains had difficulties in delivering the expected level of international business to justify their management fees.

This has been highlighted by the fact that two-thirds of guests staying in Irish hotels are local. Once business began to decline, Hilton left Limerick and Mount Wolsley; Conrad’s managemen of Mount Juliet ended; Sheraton pulled out of Fota Island; Marriot withdrew from Enfield and Druid’s Glen while Park Inn folded up its operations in Chief O’Neill’s Hotel in Smithfield, Dublin 1, Park Hotel in Dundalk and Mulranny Bay near Westport.

Even the famous Shelbourne has been in conflict with its operator, The Marriott, and a final decision on its future management is eagerly awaited.

The Four Seasons has kept a tight rein on the Ballsbridge hotel during difficult trading conditions over the the past four years and is expected to reduce losses to around €2 million this year.

Whether or not it does, the owners have to pay an annual ground rent of €700,000 to the RDS. The charge is subject to periodic review.

During the property boom, the hotel converted the fifth floor and part of the fourth floor into 24 private apartments, 20 of which were sold to wealthy purchasers. Four of them remain part of the hotel.

The Nollaig Partnership was assembled by Quinlan Private and when the hotel ran into financial difficulties during construction it also negotiated further funding from Anglo to complete it in 2001.

The Sunday Timeshas named Pat O'Donnell and Derek Quinlan as the largest shareholders, with a joint ownership of 30 per cent. Brendan O'Meara, a property investor, and Dan Morrissey, a businessman, own about 8 per cent each.

Francis Brennan, the Kenmare hotelier, has a 5 per cent stake along with David Arnold, the property developer and founder of D2 Private, property investor Mark Kavanagh and Lar Bradshaw, a former director of Anglo.