Blackstone Group Said in Talks to Increase Irish Hotels Bet

Blackstone Group LP is in talks to buy a 25 percent stake in what was once Ireland’s most expensive real estate from the U.K. unit of failed Icelandic lender Kaupthing Bank hf, two people with knowledge of the matter said.

Kaupthing Singer & Friedlander Ltd.’s administrators EY are selling the interest in three hotels once owned by now-bankrupt developer Sean Dunne in Dublin’s embassy belt in Ballsbridge, said the people, who asked not to be named as the matter is private. EY declined to comment on the transaction. In an e-mail, a spokesman for Blackstone, the biggest manager of private-equity real estate funds, declined to comment.

Dunne bought the former Berkeley Court, the Towers and Jurys Hotel in 2005 for about 380 million euros ($503 million). At the time it was the highest price per acre paid for sites in Ireland. His banks, Royal Bank of Scotland Group Plc’s Ulster Bank, Rabobank Groep NV and Kaupthing, took control of the hotels in 2009 after planning authorities refused Dunne permission to redevelop the 6.8-acre (2.8-hectare) site amid a real-estate market collapse.

The U.K. Treasury put Kaupthing Singer & Friedlander into administration in the U.K. in 2008 as it went into default. Dunne was declared bankrupt in Ireland’s High Court last month.

Blackstone is among a wave of U.S. investors, including Kennedy-Wilson Holdings Inc. and Oaktree Capital Group LLC, to snap up Irish real-estate assets in the past two years.

Blackstone, based in New York, bought the 501-bedroom Burlington Hotel in the same district in November for 67 million euros from Lloyds Banking Group Plc. That’s less than a quarter of the 288 million euros an Irish real-estate developer Bernard McNamara paid for the property in 2007. McNamara was declared bankrupt in the U.K. last year.

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