Dalata Hotel Group Plc (LON:DAL, ISE:DHG) told investors it has now submitted a planning application for the redevelopment of the Tara Towers Hotel site, located close to the recently developed Elmpark Urban Campus in Dublin.
It comes after the Irish hotel group acquired the site for €13.2mln last year.
READ: Dalata strikes €62.5mln deal to acquire freehold for two Dublin hotels
Dalata wants to demolish the existing site in order to build a new mixed use site, including a 4 star Maldron branded hotel (with 140 rooms, a restaurant, bar and meeting facilities) plus 70 residential units and a basement car park.
The plan is for the group to team up with a development partner to support the funding and construction of the project.
Dalata added that the existing Tara Towers Hotel will remain open throughout the planning process.
“The hotel has performed very well since we acquired it in January and we are very excited about the trading potential for a brand new 4 star Maldron hotel in this location. If the planning application is successful, we will review our options on the development of the site," said Dermot Crowley, Dalata deputy chief executive, business development and finance.
Analysts at Davy highlighted that the existing hotel could be expected to close in the first half of 2018, with the closure anticipated to have an impact of around €1mln.
Looking ahead to the partnering process, Davy added: “High interest from development partners is also likely given the location and residential angle.”
Elsewhere, analysts at rival Dublin broker added: “Overall this morning’s announcement is a small positive for Dalata and comes as no surprise given the company’s original intention to invest in the redevelopment of the hotel at the time of acquisition.”