February 17, 2011
By Staff Reporter
The hotel group revealed last week that it was putting the five-acre site in Dublin’s affluent Ballsbridge neighborhood up for sale. The site encompasses two hotels, both of which are particularly popular with visitors from the U.S. – Jurys Ballsbridge and The Towers.
Both hotels will be razed, as will the adjacent Berkely Court Hotel. However, the group plans to redevelop the Berkeley Court. The plans, which may take up to two years to complete, should not have any effect on existing bookings.
The three Ballsbridge hotels, along with the nearby Burlington which is also owned by JurysDoyle, have been fixtures of Dublin’s nightlife for years, and have often attracted many Dubliners as well as tourists to their various bars. In earlier decades, celebrities such as President Ronald Reagan and Frank Sinatra stayed at the hotels.
However, in recent years, the Ballsbridge establishments have been partially eclipsed by new, more vibrant competitors at the top end of the market. The board of JurysDoyle has evidently decided that the time is right to sell up.
Speculation over whether the site would be put up for sale has been rife for months. The location is generally regarded as one of the best sites in the Irish capital in terms of both its intrinsic value and its redevelopment potential.
Sources in the Irish real estate market have estimated the site’s worth at approximately EURO 200m ($240m). A standard rule-of-thumb for valuing prime commercial locations in Dublin is that one acre of land is worth about EURO40m ($48.2m).
However, some real estate experts have argued that the Jurys site may not reach the full EURO200m mark because of two factors.
First, such a price builds in an assumption that the Irish real estate market will continue to grow as vigorously has it has done during the recent boom years. Buyers may not be well disposed to taking that gamble.
Second, whoever buys the site will almost certainly seek planning permission to change its use – that process, some experts believe, could last up to three years, a delay that would cost the buyer significant amounts of money.
The sale is expected to attract the attention of many of the biggest players in property development in both the Irish and British markets. Whether any one major company will go all out to buy the site remains in doubt, however. A report in the Irish Times last week indicated that even the biggest property developers might be inclined to form consortiums to bid for the site. The rationale behind such a decision is that it would spread the risk for such a large project among several firms or individuals.
The permanent closure of Jurys Ballsbridge and The Towers will inevitably lead to job losses. However, the exact figures are disputed. JurysDoyle management claim that the two hotels, plus the Berkeley Court, currently employ just over 600 people, and that a considerable number of those will be re-employed in the Berkeley Court after it is rebuilt.
The company has also indicated that some staff may be able to find employment at its new Dublin hotel, Jurys Croke Park, which is due to open near the Gaelic Athletic Association’s main stadium in September.
JurysDoyle CEO Pat McCann seemed to send out slightly ambiguous signals on this score last week, telling reporters both that job losses “may not be that substantial at the end of the day” and that “for a lot of people, quite frankly, there will be a redundancy program.”
The main union represent the hotels workers, SIPTU, contends that the company is underestimating the number of jobs at risk. The union says that when banqueting and conference staff are included, about 900 people are employed at the three Ballsbridge hotels.
“We were expecting the company to redevelop the site,” SIPTU branch secretary Kieron Connolly said in a statement, “but the high level of job losses is a major shock. Even if you take 250 jobs into the new Berkeley Court Hotel, that still leaves 650.”
The hotel group’s decision to sell the Ballsbridge site comes in the wake of its rejection of a second takeover offer from the Precinct consortium. Precinct, which took over another Dublin landmark hotel, The Gresham, last year, had upped its offer to buy the entire JurysDoyle group from EURO15.25 ($18.37) per share to EURO16.25 ($19.57). The approach valued JurysDoyle at just over EURO1bn ($1.2bn).
However, after a brief meeting in Dublin last Thursday, the JurysDoyle board rejected the offer.
In a statement, the board contended that the second offer “remains preliminary in nature, fails to reflect fully the value of JurysDoyle and its prospects, and the approach is subject to a number of preconditions which the board believes are not capable of being satisfied.”
Precinct left open the possibility of making a third bid, but most industry observers believe that such a bid will not come soon, if at all.