Unfinished multi-million euro Irish Kilternan Hotel complex faces major writedown

The Irish National Asset Management Agency (NAMA) is selling the unfinished Kilternan Hotel and Country Club in south Dublin despite fears the asset is substantially undervalued.

Around €171.5m (US$236.5m, £142m) in loans from the former Irish Nationwide Building society was spent developing the complex between 2005 and 2007 at the height of the property boom – however Marcus Magnier, director of appointed agents Colliers International is quoting between €5m (US$6.8m, £4.1m) and €10m for the 16,435sq m (176,903sq ft) property.

In the event an offer is accepted around the half-way mark of €7.5m (US$10.3m, £6.2m), the writedown value would be 95.6 per cent.

Formerly controlled by Hugh O’Regan, who died in 2009, the failure of this development and two others with overall borrowings of €198.5m (US$273.7m, £164.5m) was one of the first signals of Ireland's major property crash.

NAMA appointed EY (Ernst & Young) as receivers, who in turn appointed Colliers International to evaluate and sell the development – according to Callum Bain, senior surveyor at Colliers International.

"The money ran out when the hotel was only 90 per cent finished and it has never been occupied," Bain told Leisure Opportunities.

"The sports complex is also only 90 per cent finished and there was going to be a golf course. The 78-bedroom apart hotel is in its skeletal shape and only 15 per cent complete."

Given the pressure on golf clubs nationwide and the close proximity of other courses to the hotel, the complex's planned 300-acre golf course is no longer a financially sound investment will also be sold off, according to the Irish Times.

Magnier estimates €4m (US$5.5, £3.3m) needs to be invested in the 128-bedroom hotel to ensure its completion. Suggested alternative uses for this property include a nursing home, private clinic, educational training facility and a casino.

A further €1m (US$1.3m, £0.8m) is also forecast for the completion of the 6,957sq m (74,883sq ft) sports complex, which features a steamroom, sauna and treatment rooms.