Covid knocks €11m off Shelbourne valuation

Kennedy Wilson acquired the luxury hotel in 2014 from Nama and invested heavily in the property

John Mulligan Twitter Email

May 01 2021 02:30 AM

US property investment group Kennedy Wilson has knocked £10m (€11m) off the value of the landmark Shelbourne Hotel in Dublin as the pandemic ravages the hospitality sector.

Accounts just published for its European arm show that the five-star hotel was valued at £176.4m (€202.5m) at the end of 2020, compared to £186.3m at the end of 2019.

Kennedy Wilson acquired the Shelbourne Hotel from Nama in 2014 for about $152m and spent €36m refurbishing it.

Accounts for Kennedy Wilson Europe Real Estate show that the Shelbourne generated revenue of £10.7m (€12.2m) 2020.

That would have accounted for just a small part of the year, with hotels having been effectively closed when the first lockdown was implemented in March 2020. They were opened intermittently during the remainder of the year.

Accounts for a separate company, KW Shelbourne Ops, show that the hotel generated revenue of €42m in 2019 and a loss after tax of €632,000.

That compared to revenue of €44m in 2018, when it made a €4m profit.

The cost of the Shelbourne’s sales last year was £16.8m. It made a £10m loss for 2020.

The valuation placed on the Shelbourne Hotel at the end of 2020, assumes a normal operating environment and occupancy of 89pc.

Kennedy Wilson Europe Real Estate holds assets in the UK, Ireland, Italy and Spain.

“The board is pleased with the performance of the group during the year, despite the challenges arising from the Covid-19 global pandemic,” its accounts note.

It said gross revenues declined last year to £208m from £132m, primarily as a result of the sale of a number of hotel and commercial assets.

Kennedy Wilson has significant property interests in Ireland across residential and commercial assets.