Dalata Hotel buys operating interest in Hilton's Double Tree hotel in Ireland

AIM-listed Irish hotel operator Dalata Hotel Group agreed to buy the operating interest in four star Double Tree by Hilton hotel in Dublin for €2.5m, and will start a 25 year lease with the new property’s owners.

German investor Deka Immobilien agreed to buy the freehold of the property from the legal owner Sussex Road Nominee and BNY Mellon Trust, a trustee for the beneficial owner, BRE Ireland Property Fund.

Once the acquisition is finalised in November Delata will start its 25-year operating lease, subject to conditions such as periodic rent reviews, agreed with Deka, the new owners of the property.

The acquisition is subject to approval from the Competition and Consumer Protection Commission and Deka completing the purchase of the freehold in the hotel.

The hotel, which will be rebranded Clayton, had revenues of €29.5m in 2015 and pre-tax of €2.2m. If it had traded under the terms of the operating lease the hotel would have contributed €4.3 m to Dalata Group’s earnings before interest, tax, amortisation and depreciation (EBITDA) last year.

Shane Casserly, head of development and strategy at Dalata, said: “The hotel will be an excellent addition to our portfolio and the Clayton brand. We will continue to invest in the property to ensure that it retains its position as the leading venue for large conferences and functions in the city.”

The hotel, on the corner of Sussex Road and Burlington Road in the Dublin city centre, has 502 bedrooms, two bars, a restaurant, lounge, 24-hour gym and conference rooms.

Shares in Dalata Hotel Group were down 2.09% to 340.25p at 1251 BST.