Europe -  Dublin, Ireland

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Dublin has consolidated its position as an ICT hub of Europe, and now following the UK’s exit, especially within the E.U. The continued growth of the ICT sector on top the strong FIRE industries is contributing to the city’s central office population and overall hotel demand.  2020 arrested this growth to a degree however, with the Irish Central Statistics Office (CSO) recently reporting that there was an overall net decline in office-based workers in Dublin of over 7,000 in 2020, representing a decrease of 2.6% on 2019. Much of this reduction (remote working and job losses) was in administrative and support functions (13,000) which were then offset by the growth in tech-based industries and professional services.

The vacancy rate of the city’s office market has reduced from 20%+ following the global financial crisis to around 9% today despite additional supply, with reasonably strong current occupier demand and ongoing additional office requirements from companies including LinkedIn and Salesforce. These underpin a strong office development and investment market generally, at a time when there are signs that employers are also increasingly promoting a return to the office.

As the city went into lockdown and workers were forced to stay at home at the start of 2020, the city’s hotels also closed and were then only open for essential purposes. Domestically, there were severe restrictions on movement, and coupled with standardised social distancing measures, demand for hotels was negligible for the year. With overseas visitors typically accounting for up to 80 per cent of Dublin’s tourism mix, performance dropped substantially in the year, recording a 63% decrease in occupancy to 31%, and a 28% decrease in ADR, resulting in a RevPAR decline of 73% from 2019 levels. The length of the recovery period may depend to a greater or lesser degree on the re-establishment of the international airlines as well as vaccination rates, however a historic annual occupancy of around 83% suggests a balanced mix of demand drivers which should begin to re-emerge as the pandemic recedes.

Dublin’s lack of hotel supply was somewhat of an issue until 2017, since when over 3,000 rooms have been built to address this perceived shortfall across mainly the select service and lifestyle brands including Hard Rock, Moxy and Aloft. An additional 4,000 rooms are under-construction (over 500 of which are across three Staycity projects alone) at various stages. Added to these changes, some commentators have suggested that up to 20% of the city centre’s hotels may never reopen due to distress or conversion to alternative uses and there were clear signs of preparations for recapitalising amongst hotel companies by the end of the year coupled with a rise in opportunistic investor appetite.

There were only around twenty hotel transactions across Ireland in 2020 with the German real estate fund Deka Immobilien acquiring the 187-room Clayton Hotel Charlemont in Dublin, from owner-operator Dalata for €65 million (€348,000 per room) at approx. 4.7%, subject to a 35-year FRI lease, marking the main transaction.

Overall, hotel values in Dublin increased by -15.9%  in 2020, as recorded in our 2020 European Hotel Valuation Index.

Change In Value For Market: (€Euro)

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)