The prospect of an attractive 6.3 per cent net initial yield supported by “one of Europe’s strongest hotel covenants” should help to drive the sale of the four-star Maldron Hotel in Oranmore, Co Galway. The hotel is being offered to the market by agent Savills at a guide price of €13 million.
The hotel, which opened for business in 1998, comprises 113 bedrooms along with extensive conference facilities, a full leisure club and swimming pool. The investment comes for sale subject to the existing occupational lease with Caruso Limited, guaranteed by Dalata (with more than 11 years remaining) and operated by Dalata Ireland under the four-star Maldron brand.
The Maldron Hotel is situated in a highly accessible location, and is close to several of Galway’s business and industrial parks, Ballybrit Racecourse and the city’s public and private hospitals. Galway is the pharmaceutical and medical technology centre for the west of Ireland and is home to many of the world’s major names in these fields including Boston Scientific, Johnson & Johnson and Medtronic. The city also provides a base for Fidelity Investments, Oracle, SAP, Smyths and Wayfair. Galway is, of course, one of the country’s leading tourist destinations with numerous annual festivals and is the largest stopping point along the hugely successful Wild Atlantic Way.
At a guide price of €13 million, the Maldron Hotel’s current upward-only annual rent of €900,000 represents a net initial yield of 6.3 per cent. The next rent review is due in January 2023.
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Commenting on the sale, Tom Barrett, head of Savills hotel and leisure division, said: “Galway hotels trade with consistently high occupancy and strong average daily rate [ADR] growth. Year round, the city attracts high-spending domestic and international tourists. The Maldron Oranmore represents a rare opportunity to acquire one of Europe’s strongest hotel covenants.”
