Goldman Sachs set to buy marquee hotel loan portfolio from Ulster Bank

Goldman Sachs is set to acquire a portfolio of loans from Ulster Bank connected with a number of high-profile Irish hotels.

It is understood the global investment bank has emerged as the preferred bidder in the sale, which is part of Project Nadal, a plan to sell a portfolio of loans and assets across hotels, pubs and hostels on both sides of the Border by Ulster Bank.

The loans are thought to have had a face value of about €200 million.

The hotels associated with the loans include the Radisson Blu Hotel at Golden Lane, near St Patrick's Cathedral in Dublin; the Radisson Blu Hotel at Dublin Airport; the Hilton Hotel in Kilmainham, close to Heuston Station; the Arlington Hotel at Lord Edward Street, Dublin; and the five-star Merchant Hotel in the centre of Belfast.

Trading well

The four-star Radisson property in Golden Lane has 150 bedrooms, while the Radisson Blu at the airport campus has 229 bedrooms. The Hilton in Kilmainham has 110 bedrooms and is believed to be trading well.

The 63-bedroom Arlington Hotel backs onto Temple Bar and is one of the most competitive in the city in terms of room rates, while the five-star Merchant Hotel at Skipper Street in Belfast has 62 bedrooms.

No comment on the sale was available from either Ulster Bank or Goldman Sachs.

Ulster Bank had engaged estate agents CBRE and accounting group KPMG to handle the portfolio sale. It it understood that there was significant interest from overseas investment funds in the assets.

On Wednesday, Irish-owned hotel group Dalata announced it had agreed to buy two other hotels that were part of Project Nadal – the Clayton in Galway and Whites in Wexford.

Dalata paid €31.7 million for the two hotels and the transaction is expected to close within four weeks. The two hotels achieved earnings before interest, tax, depreciation, amortisation, rent and management fees of €2.5 million last year.

Both hotels had been operated by Dalata since 2009 under management contract and the deals are part of a stated strategy by Dalata to acquire more hotels in Ireland. Dalata is the country’s biggest hotel operator.

Sales strategy

The loan sales by Ulster Bank are part of its strategy to sell certain assets that are considered to be non-core, as it continues to restructure its business in the wake of the financial crash in late 2008.

Its parent company Royal Bank of Scotland has identified billions of euro of assets at Ulster Bank that will be sold over a two-year period by a specialist unit called RBS Capital Resolution.

Reports have indicated that Project Nadal comprises other assets, including two hostels in Dublin and a number of pubs.