If ever there was a poster child for the excesses of the Celtic Tiger, it was the Kilternan Hotel & Country Club.
One of 134 hotels whose related loans were transferred to Nama, it was one of just two of that number that never actually opened its doors. Irish Nationwide put up funding of €171.5 million to realise the dream of developer Hugh O’Regan, only for the collapse of his empire in August 2009 to be one of the first significant casualties of the financial implosion.
Since then, it has remained an unwanted white elephant on the foothills of the Dublin mountains. Even Nama wanted little to do with it, worrying that any move to offload it could set a new floor for discounts on hotel assets.
And so it has proved. The Comer brothers, who cannily stayed out of Ireland during the excesses of the Celtic Tiger but have since filled their pockets with now undervalued Irish assets, are understood to have paid just 4 per cent of the face value of related loans transferred to Nama from Irish Nationwide – around €7 million.
The good news for Nama is that the Irish property sector is now sufficiently robust to bear the 96 per cent discount on the Kilternan hotel without flinching.
But it remains to be seen what the Comers will do with the new trophy asset. Buyers who cast an eye over the property ahead of the sale estimated it would take another €20 million to complete the project but there is no certainty the hotel and club, as envisaged by O’Regan, can be a viable business. Doubts exist over whether a planned golf course will proceed given competing venues close by and O’Regan was not the first to discover that the Kilternan property promised more than it was capable of delivering. It has proven too close to Dublin in the past to be a destination, yet too far off the beaten track to attract passing business.
Of course, the Comers have a track record in housing and the Kilternan property is resting on 300 acres in a rapidly expanding area of south Dublin. They might yet join a very elite group of two to actually make a profit out of their investment in Kilternan.