DUBLIN'S hotel building boom is set to continue with the Scottish hotels group Stakis planning to invest £17 million in a 194 bedroom, four star hotel at Charlemont Place, beside the Grand Canal. The hotel, which is due to open in the autumn of 1997, will be known as Stakis Dublin and will employ 130 people.

The hotel will be built on part of the 4.5 acre site assembled by Albert Holdings, a company controlled by London based Irish businessman, Mr J.A. Murphy. Part of this site is being developed for apartments by Cosgrave Homes, while there are also plans for 130,000 sq ft of offices. The proposed LUAS light rail will also adjoin the site.

Stakis, however, will not develop the hotel itself, but will lease it from Charlemont Properties, a new company whose only asset is the hotel.

Stakis will be paying rent of £1.19 million to the developers, equivalent to a yield of 7 per cent, but will have an option to buy the freehold in the year 2005 at a price which will not exceed the £17 million development costs.

Stakis will enter a 21 year lease with the developer once the hotel is complete, but the lease will be subject to a put and call option in year eight which will allow Stakis to buy the freehold title to the land and the hotel.

A spokesman for Stakis would not reveal the formula that will be used to determine the eventual cost of buying out the freehold, but it is understood that the final price will reflect the £9 million that Stakis will pay to Charlemont Properties during the eight year rental period to 2005.

This will be Stakis's first hotel in the Republic, although the group is currently building a £16.3 million hotel, conference centre and golf resort at Templepatrick near Belfast.

The Stakis spokesman said that the group had no plans to further extend its operations in Ireland but would keep its options open.

The Stakis spokesman said that the group had no fears of Dublin being over supplied with hotels, despite the surge in hotel building in the past few years. She added that Stakis would expect to draw custom from both the business and tourism sectors.

Based in Glasgow, Stakis operates throughout the UK as well as having a hotel in Gibraltar.