Updated: 09/06/17 : 06:57:27
Ireland's largest hotel group, Dalata, controlled by Sligo man Pat McCann,pictured
, has agreed the sale and leaseback of its Clayton Hotel in Cardiff Wales, to M&G Real Estate, one of the world’s largest property investors.
The hotel will be sold for £22.1m (€26m), and the sale is expected to be completed by mid-June 2017.
The hotel will then be let for a 35 year term, with Dalata paying rent on the property of £1.15m per year, subject to rent reviews every five years.
Dalata will retain the fixtures and fittings within the hotel to the value of £2.1m.
The acquisition and subsequent sale and leaseback will result in an initial rental saving of approximately £350k per annum, according to Davy analysts.
The consideration is payable in cash, and the proceeds of the transaction will be used to reduce net debt arising from recent acquisitions.
“We are delighted to be engaged with such a prestigious investment partner as M&G Real Estate who value our balance sheet and operating covenant appropriately.
The hotel continues to perform strongly and this reaffirms our commitment to developing our hotel business within the UK,” Dermot Crowley, deputy ceo business development and finance at Dalata, said.
The Clayton Hotel Cardiff is a 4-star hotel containing 216 rooms, a bar and restaurant, a fitness suite and extensive meeting room facilities.
In 2016, the hotel generated earnings before interest, taxation, depreciation, amortization, and restructuring of £2.3m.