Dalata acquires leasehold interests, secures management

Dalata Hotel Group has conditionally agreed to acquire the leasehold interest of the Gibson Hotel Dublin, the Croydon Park Hotel in Croydon, the Clarion Hotel Cork and the Clarion Hotel Limerick for €40 million (US$43.81 million). The leasehold interest comprises of operating leases with an average term of 18 years outstanding. As part of the transaction, the Dalata will also take over the management of the Clarion Liffey Valley Hotel in Dublin under a short-term management contract.

Dalata plans to invest €14 million (US$15.33 million) over the next two years in refurbishing the hotels in Cork, Limerick and Croydon. The four leasehold properties will be rebranded to Clayton Hotels, increasing the Clayton portfolio to 18 hotels. 

Underlying EBITDA for the four hotels in 2015, after adjusting for costs and revenues that will not transfer as part of the transaction, is expected to be €4.1 million (US$4.49 million). Including revenues from the short-term management contract, underlying EBITDA is expected to be €4.7 million (US$5.15 million).