Dublin’s Aparthotel Stock Set For Mega Boost With 2,000-Plus Room Pipeline
Dublin trails behind many European cities in terms of its aparthotel and serviced apartment offering, with fewer than 400 units — around 2% of the overall hotel room stock — but a strong development pipeline is set to deliver considerable new supply over the next two to three years.
Research carried out by Savills estimates that Dublin had just 0.08 extended stay/aparthotel units per 1,000 visitors in 2016, while Barcelona and Amsterdam had 0.2, London had 0.6 and Paris had 1.08 units for every 1,000 visitors.
“In cities like Paris and New York, around 10% of stock is serviced apartment or aparthotel so we’re definitely undersupplied,” JLL Senior Vice President of Hotels Dan O’Connor said.
But things are set to change quite quickly: according to CBRE Hotels Director John Hughes, schemes that will deliver around 410 units total are currently on site, while planning permission is in place for around 1,200 units.
O’Connor estimates that over 2,000 units are in various stages of planning. “While it’s a big pipeline, I don’t think it’s a scary one because we’re coming from practically nothing,” he said. “Any mature market stabilises around 10% and that’s what our pipeline looks like.”
So, who are the main players who will be delivering all these new units?
Most active in the market at present is homegrown operator Staycity, which is involved in four new schemes in Dublin. The company has three existing locations in the city with 179 apartments.
Early in 2019, it will open in Chancery Lane with 50 apartments. The company has also signed pre-lets on two schemes being developed by Tetrarch. The first of these, a 142-unit property on Mark Street, is due to open in the second quarter of 2020. The second is a 202-key aparthotel on Moss and Townsend streets, part of a mixed-use development that also includes a 393-bed hotel and an apartment block. Construction is due to begin later this year and to be complete by Q3 2020.
Staycity has also signed up as the operator on a 343-key aparthotel to be developed by Bain Capital beside the fruit markets on Little Mary Street. The scheme is under appeal with An Bord Pleanála at the moment. Staycity expects completion to be in the third quarter of 2020.
These schemes will bring its key count to 970, and Staycity has said it expects to have 1,500 units up and running in Dublin by 2021.
The company is also on a major expansion drive across Europe and has 1,830 units between Ireland, the U.K. and France, as well as a pipeline of over 4,500 apartments, including in Germany and Italy, and plans to reach 15,000 by 2022.
Aimed at the more corporate end of the market, Prem Group operates three extended stay properties in Dublin totalling 125 units: a Premier Suites in Sandyford, and the company’s deluxe Premier Suites Plus brand in Ballsbridge and on Leeson Street. The apartments are designed for longer stays — usually 30 days and upward — and provide a minimum 330 SF.
The company said it has no immediate plans for expansion in Dublin. It is, however, growing its international footprint and recently opened its 10th property in the U.K. — Premier Suites Plus Glasgow — and will be opening in Antwerp in September and in Amsterdam in 2019. Prem Group also operates in France and Germany and has over 50 hotels and serviced apartments in its portfolio.
In Dublin, meanwhile, it is currently understood to be selling the Ballsbridge property for over €16M in a sale and leaseback deal. Prem Group bought the property — formerly Merrion Hall — at the end of 2013 and said at the time that it expected to invest a total of €5M between the purchase and its refurbishment.
Saco Property Group, which was bought by Brookfield earlier this year, is planning over 400 units in two new schemes in the city. The Ormonde Locke, which is being developed on the site of the former Zanzibar nightclub on Lower Ormonde Quay, will comprise 160 units and is due to open in 2020.
In recent weeks the company also announced that it has bought a site on North Wall Quay with planning permission for 241 units — 138 studios, 72 one-beds and 31 two-beds — as well as all-day dining, a cocktail bar, a coworking facility and a gym.
The company is in expansionary mode across Europe but said any growth plans in Dublin will depend on whether it can identify a suitable opportunity.
U.K. player Marlin is developing a 300-bedroom aparthotel on Bow Lane in Dublin 2. It will be the second hotel in the company’s portfolio, which also includes six serviced apartment properties in London. The hotel is scheduled for completion in the middle of 2019 after a total investment of €60M.
Marlin, which is owned by Irishman John Corless, said it aims to grow the brand in Dublin and has plans for a 30-bed aparthotel on Aungier Street and another 100-bed property at an unspecified site.
Earlier this year, An Bord Pleanala gave permission for a 298-unit aparthotel on the site of the former Tivoli Theatre on Francis Street. Another scheme in final planning is the 150-bed St James Street Aparthotel.
And as part of his scheme at Spencer Place, Johnny Ronan plans to build a 102-unit aparthotel.
Meanwhile, a number of international operators are looking at opportunities in the Dublin market. The development director of U.K. group Go Native was in the city in recent weeks touring sites. Singaporean serviced apartment group Ascott is keen to have an aparthotel in Dublin following its purchase of the 136-room Temple Bar Hotel in December 2016 for €55.1M. Other interested parties include BridgeStreet, Fraser and Zoku.
“The trading performance of the city is a big attraction,” Hughes said. “And the aparthotel concept has been tried and tested in other European cities and Dublin is now catching up.”