Apollo Pulls €500M Hotel Sale, But Yields And Repurposing Should Spur Market
Apollo Global Management has withdrawn the sale of a circa €500M Irish hotel portfolio and is looking to refinance the largest part of it instead, CoStar reports.
When bids failed to meet its valuation, the U.S. private equity firm decided to keep the Tifco portfolio after hiring Eastdil Secured and JLL to sell it last year.
Apollo is now looking to refinance a circa €175M senior loan from Deutsche Bank set to mature in the spring, according to a source familiar with the situation. It is reportedly secured against 14 Crowne Plaza and Travelodge hotels worth around €300M.
The properties, which are occupied by refugees, are being held by Tifco, which is owned by Apollo.
Despite the withdrawal of the portfolio, late 2023 saw a number of hotel deals. The Irish hotel industry returned to pre-pandemic performance levels, according to a report from Savills Ireland, which hailed a “cautious yet optimistic outlook” for 2024, with yields moving from 3.6% in early 2022 to between 4.75% and 5% now.
In January, Leonardo Hotels opened its first Irish NYX Hotel in Dublin, a 175-room property at Portobello Harbour on the Grand Canal in south Dublin. The Dublin hotel follows the brand's London entry in 2021 and precedes planned openings in Cyprus and Greece.
Meanwhile, Ireland’s largest hotel group, Dalata, agreed on a two-year extension of its licensing agreement for the 251-bedroom Maldron Hotel Dublin Airport.
Law firm DLA Piper added that prospects for 2024 look positive, with continued high demand and strong performance anticipated. Revenue per available room and average daily rates have increased significantly.
“Deal activity will undoubtedly increase with borrowers either refinancing existing debt or disposing of assets (if refinancing opportunities are unavailable) as term facilities mature and lower interest rate facilities expire,” the company said in a December forecast.
The company also pointed to repurposing of office space to hotels, including planning permission for the conversion of the Arnotts car park on Henry Street in Dublin 1 into a 245-room hotel over the department store. Planning permission has also been granted for the conversion of an old courthouse in Cork City to a hotel, a former chapel building into a hotel in Dublin 2, and a conversion of Telephone House, an office building in Dublin 1 set to become a 296-bedroom aparthotel.
