Cordish Intensifies Its Commitment To Its Mega Project In Madrid

21 March 2017 – Expansión

The implementation of a waste plant next to the site and a request for more information from the Community of Madrid have not deterred the US group Cordish in its plans to invest €2,000 million on the construction of the largest tourist and leisure complex in Europe.

Last December, Cordish, a US group with operations in the urban planning, health and leisure resorts business, unveiled its plans for a mega real estate project in Madrid, which includes 2,700 hotel rooms, 100,000 m2 of retail space, three conference centres, cinemas and a leisure space with casino.

With a view to its implementation, Cordish has signed agreements to buy land in the area (up to 134 hectares). (…).

In parallel, Cordish is working with the Community of Madrid on a process that will allow it to be awarded the contract to build this project. Although the idea came from the US group, given that it has constructed similar tourist complexes in several cities in the USA, the regional Government is obliged to put its construction out to public tender, even though, it is likely that only Cordish will submit a bid. (…).

Recycling plant

(…). Weeks after the plans were submitted, approval was given for the opening of a new waste treatment plant, measuring 507,000 m2, between the towns of Torrejón de Ardoz, Loeches and Torres de la Alameda, which is exactly where the macro-complex was going to be located.

Nevertheless, Cordish considers that its plans for Live! Resort Madrid are “completely compatible” with the new plant.

“This recycling plant will be equipped with the latest technology and will be located 2 km from the edge of the leisure complex and on the other side of the AVE train tracks. In fact, Cordish understands that this plant is going to be the solution to the historical problem facing the Community of Madrid in terms of waste management and considers that both projects can co-exist and will even be beneficial for each other”, explain sources at the company.

During its initial phase, Life! Resorts Madrid will invest around €500 million. This first phase will be focused around a central square, where a hotel will be built, a convention centre and “probably” the gaming area.

In total, Cordish expects to spend around €2,200 million in Madrid, although that figure could increase to €3,000 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Iberdrola Puts Hilton Diagonal Mar Hotel Up For Sale

21 March 2017 – Expansión

Iberdrola has hung the “for sale” sign up over the jewel in the crown of its real estate subsidiary: the building that houses the Hotel Hilton Diagonal Mar, a four-star property located at the intersection of Calles García Faria and Taulet, in the Barcelona neighbourhood of Diagonal Mar.

The company has contracted the real estate consultancy firm Irea to sell the asset, which has an asking price of more than €150 million, according to market sources.

These sources also indicate that the process will be restricted and that they will look to attract four or five candidates interested in acquiring the asset.

The building that houses the Hilton Diagonal Mar is the largest asset in the real estate subsidiary’s current portfolio, behind Torre Iberdrola in Bilbao, which is the corporate headquarters of the multinational company and is therefore strategic for the energy group and not susceptible to being sold.

Iberdrola’s real estate subsidiary has different types of assets in its portfolio, ranging from primary homes and tourist apartments, to offices, industrial warehouses and shopping centres. Currently, Iberdrola Inmobiliaria has a portfolio of real estate assets under management with a combined gross leasable area of more than 200,000 m2.

In Barcelona, the company owns the office buildings Torre Auditori and Torre Marina (in the final phases of construction).

The hotel now up for sale, work of the architect Oscar Tusquets and opened in 2005, was developed by the real estate subsidiary of Iberdrola.

Agreement with Hilton

Just before the construction work was completed, the company reached an agreement with Hilton whereby the hotel chain would take charge of the operation of the establishment for 20 years.

The Hilton Diagonal Mar has almost 420 rooms and around 20 suites, as well as multi-functional meeting rooms and a ballroom with capacity for 1,000 people. The building, which is oriented towards corporate events and conferences, is located opposite the Diagonal Mar shopping centre, a stone’s throw away from Barcelona’s International Convention Centre (CCIB) and 18 km from the airport.

Real estate investment in hotel assets returned to record figures in 2016. In this way, almost a quarter of all investment in commercial assets was linked to hotel assets.

Specifically, last year saw investment volumes of €2,200 million, the second highest amount ever recorded, thanks to a boost from some significant transactions, such as the sale of Merlin’s hotel portfolio – comprising 19 hotels and 3,645 rooms – to Foncière des Murs for €535 million. Likewise, last year, the Hotel Villa Magna was sold to the Turkish group Dogus for €180 million, in what is still the highest grossing operation to date in terms of price per room (€1.2 million), ahead of the almost €800,000 per room that was paid for the Hotel Ritz in 2015. (…).

Original story: Expansión (by R. Arroyo and M. Á. Patiño)

Translation: Carmel Drake

Millenium Group Resumes Its Hotel Socimi’s Activity

15 March 2017 – Cinco Días

The Millenium group has resumed its plans to launch a hotel Socimi. Following a break caused by the absence of a Government and the misgivings of some of its investors, the company has returned to the project.

The aim of the firm led by Javier Illán, which has now constituted the Socimi Millenium Hotels Real Estate, involves listing the company on the stock market in 2019, whereby maximising the term permitted for that purpose. Meanwhile, the vehicle is working hard to secure high profile investors and acquire hotel establishments.

Millenium plans to raise around €400 million from investors and expects that its Socimi will have a market valuation of between €650 million and €700 million when its debuts. For the time being, the company does not have a registered advisor for its debut on the stock market, but it has received support from investors who have participated in its investments since 2000, including large homegrown and overseas real estate mutual institutions and pension funds.

For new investors, Millenium has established a minimum entry ticket of €5 million. Moreover, it has not ruled out the possibility of allowing hotel owners to take a share in its share capital in exchange for “gifting” the property to its portfolio. Regarding the debut on the stock market, the company may open up another stock tranche, with a lower minimum investment of around €250,000, to give liquidity to its shares.

The vehicle is expected to acquire around thirty hotels, including those that the group already owns, such as the Hesperia on Paseo de la Castellana, the Hotusa in Plaza de Castilla and the Tryp Chamberí, all in the centre of Madrid.

The Socimi will acquire urban and vacation hotels, however, Javier Illán states that they are also analysing cities that receive lots of tourist visitors. Besides Madrid and Barcelona, he points to other major capitals such as Málaga, Sevilla, Córdoba, Granada, Bilbao, San Sebastián and Valencia. The Canary Islands and the Balearic Islands, together with the Costa del Sol, will be its areas of focus in the vacation segment, all areas that have been under the spotlight of domestic and international investors alike, over the last year.

This year, Illán hopes to close around ten acquisitions on which he expects to spend around €200 million. He also acknowledges that the company is holding talks with all of the hotel chains interested in operating lease contracts.

For the time being, none of these operations has materialised and the hope is that they will be completed one by one and not in batches to avoid acquiring unwanted assets.

The Director also assures that he intends for 70% of the portfolio of establishments to require investment for their repositioning and refurbishment (value added, in English), which whereby differentiates it from the model adopted by Hispania in the vehicle that it created together with Barceló: Bay.

The group, which specialises in the development of luxury residential properties and commercial premises is carrying out detailed analysis with a view to creating a Board of Directors for the Socimi, which will mainly comprise independent directors.

Original story: Cinco Días (by L. Salces and A. Simón)

Translation: Carmel Drake

Tremón Wants To Invest €300M In Málaga’s Tívoli Amusement Park

13 March 2017 – Diario Sur

The real estate group Tremón is planning to modernise the mythical Tívoli amusement park in Benalmádena, and develop the surrounding area into a retail and leisure complex. The Madrilenian company is looking to create a complex covering more than 152,000 m2, which will include two retail areas to the east of the amusement park, a green space and an underground car park with 2,000 spaces.

The plans, which would involve the transformation of Arroyo de la Miel, would see more than 57,000 m2 of land being dedicated to retail use, a hypermarket, several cinema screens, three office buildings, an auditorium and a hotel. The space dedicated to Tívoli would not change, but the park would be subjected to a comprehensive remodelling process involving the installation of 43 attractions including a space for demonstrating extreme tricks and an artificial snow dome, which would take up almost all of the southern area. The complex, presented as a large theme park, retail and leisure centre, would retain the Tívoli name.

Until now, the ownership of the amusement park has represented the main obstacle preventing this project from being carried out. Tremón bought Tívoli from the businessman Rafael Gómez, known as Sandokán and owner of the company Arenal 2000, in a huge operation that included the sale of 7 million m2 of land spread over thirty-odd properties across Andalucía.

Nevertheless, Gómez claimed that the purchase had not been completed and took the matter to the court for alleged non-payment. That situation led to the paradox that the ownership of Tívoli belonged to Tremón, but the park was still managed by a company linked to the Cordoban businessman, who was recently sentenced to five years in prison for crimes against the Tax Authorities.

According to sources in the know, Tremón has expressed its willingness to go ahead with the project, committing investment of more than €300 million, as soon as the tortuous legal process with Sandokán has come to an end. The proposal has convinced the Town Hall of Benalmádena, which is keen to expedite the administrative process on the basis that the creation of jobs and the economic impact of the complex would constitute a unique opportunity to reactivate the commercial fabric of Arroyo de la Miel. In addition, the Town Hall will pocket a huge amount of money for granting building permits and other tax revenues, which will breathe life into the very empty municipal coffers. (…).

The project would create more than 1,600 direct jobs during the construction phase, which would last for two years, and another 3,300 jobs once operational. (…).

Original story: Diario Sur (by Alberto Gómez)

Translation: Carmel Drake

Hyatt Returns To Madrid To Manage Hotel On Gran Vía, 31

10 March 2017 – Cinco Días

Hyatt is returning to Madrid. The hotel chain is coming back to the capital nine years after abandoning its role as the manager of Hotel Villa Magna. This week, the company has announced that it will manage the future hotel whose doors are going to open at number 31 Gran Vía, a property that is owned by the company Exacorp One, itself owned by the Mexican Díaz Estrada family.

The hotel chain will open an establishment there during the fourth quarter of this year, under the Hyatt Centric brand, according to a statement made this week by the firm. As such, it will become the first establishment to bear the hotel chain’s urban brand in Spain.

The future hotel will have 159 rooms, a restaurant called “Hielo y Carbón” (Coal and Ice) and a roof-top terrace, which will open during 2018. Jorge Díaz Estrada, Director of Exacorp, recognises that “the hotel’s central location, combined with its unique design, will attract business and pleasure travellers alike”.

In addition to this property, Díaz Estrada has entered Madrid’s real estate market with a bang in recent years with the purchase of several buildings. The most iconic property in its portfolio is Apple’s current flagship store in Puerta del Sol. In addition, the firm has acquired properties at numbers 25 and 27 Calle Montera.

Meanwhile, Hyatt’s return represents yet another boost for the hotel sector in the city. A real commitment from the international brands, which will be further strengthened by the arrival of Four Seasons in the Canalejas Complex and the W, which Starwood is going to open across the road. These establishments will encourage more international travellers and will, according to sources in sector, favour an increase in average prices for hoteliers.

In addition, a number of Spanish hotel chains have also strengthened their presence in the area in recent times. In this vein, Barceló has opened a hotel in Torre de Madrid, close to where Riu is expected to manage the future hotel in Edificio España. Meanwhile, NH, will open the doors to its new hotel on Gran Vía at the beginning of next year.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake

Portobello Capital Buys Blue Sea Hotels For c. €70M

9 March 2017 – El Economista

The private equity fund Portobello is on a roll. According to sources consulted by El Economista, the firm has purchased the hotel chain Blue Sea for around €70 million.

The transaction involves the acquisition of 17 hotel establishments, located mainly in the Canary Islands and the Balearic Islands, plus two that the hotel chain owns in Morocco (one in Berkane and one in Marrakech). The hotel chain’s turnover amounts to around €50 million. Sebastiá Catalá will continue to lead the company – he will also retain his 5% stake – meanwhile, Portobello has recruited Franciso Gimena (ex-Globalia) for the role of Vice President.

As a result of this operation, the fund controlled by Íñigo Sánchez-Asiaín, Juan Luis Ramírez, Ramón Cerdeiras and Luis Peñarrocha will make its debut in the tourist sector, a business that it has been interested in for a while, given the positive performance of the market in Spain. In this regard, the country received 75.3 million tourist visitors last year – which represents an increase of 9.9% with respect to 2015 – of which, almost 25% opted to visit the Balearic and Canary Islands, where Blue Sea has its star hotels. The hotel chain also has a presence in Madrid, Torremolinos (Málaga) and Benidorm (Alicante).

PE house on a roll

Portobello Capital is enjoying one of its best periods since it was founded in 2011 by former partners of Ibersuizas. Its first investment vehicle has been invested in its entirety in record time – in fact, the firm has received several awards in recent months for its operations – and it has now completed several divestments, such as of its geriatric business (Vitalia Plus), which it sold on Monday to the fund CVC Capital Partners for between €200 million and €250 million.

Original story: El Economista (by Araceli Muñoz)

Translation: Carmel Drake

Another RE Chain Is Born: Visasur Creates Azzahar Hoteles

27 February 2017 – Preferente

Azzahar Hoteles is the new chain from the Visasur Group, created in collaboration with Némesis Capital & Investment. It owns two hotels in Sevilla and Valencia, according to an announcement made by the Andalucían company. The hotel chain emerged in January when Visasur Inmobiliaria and Némesis Capital became the main investors in the consultancy firm CR Business by acquiring a 70% stake in the share capital, split 40% and 30%, respectively.

Following the acquisition, the consultancy firm was renamed Azzahar Hoteles, a brand that “is committed to urban and business tourism”, explained the CEO of the Sevillan group, Nicolás Álvarez. “The new hotel brand is planning an ambitious growth process, with forecasts that it will be managing seven new properties by 2021, containing more than 500 rooms”, according to sources at the company.

Nevertheless, for the time being, the chain has just two hotel properties: one in Sevilla, Hotel Doña Manuela, and the other in Valencia, Hotel Táctica de Paterna, according to several sources.

The Visasur Group is a family business that focuses on the development of real estate projects, whilst Némesis Capital & Investment is a strategic and financial consultancy firm. After acquiring 70% of CR Business, both companies have created the new Andalucían hotel brand Azzahar Hoteles.

Original story: Preferente

Translation: Carmel Drake

Hospes Hotels’ Profits Rose By 18% In 2016 To €10.5M

15 February 2017 – Expansión

Hospes Hotels, the luxury hotel chain in which the Koplowitz family owns a stake, generated an operating profit of €10.5 million in 2016, up by 18%. Its revenues exceeded €30 million and its operating margin amounted to 35% for the second year in a row.

Original story: Expansión

Translation: Carmel Drake

Villar Mir Sells 50% Of Canalejas To PokerStars Founder

13 February 2017 – Expansión

Mark Scheinberg, the co-founder of the website PokerStars, has fought off other candidates, such as the Middle Eastern fund Adia, the real estate fund TH Real Estate and the banker Jaime Gilinski in the bid for the 50% stake in the company Centro Canalejas de Madrid that Villar Mir put up for sale last year.

The Israelí businessman and Isle of Man resident will pay €225 million for half of the development company behind the complex, and OHL will receive €78.85 million of that amount, after it sold the 17.5% stake that it owned in the company through its subsidiary OHL Desarrollos, confirmed the company last Thursday in a statement to Spain’s National Securities and Exchange Commission (CNMV).

Following the operation, OHL Desarrollos and Grupo Villar Mir, which will continue as shareholders of the company with stakes of 17.5% and 32.5%, respectively, will retain control over the management of the project until it opens. The sale will generate a profit of approximately €29 million for OHL.

Scheinberg, who is 43 years old and who has a fortune worth $4,100 million according to Forbes, thanks to the success of his online gaming portal, has whereby become the new partner in the project that Villar Mir is undertaking in the centre of Madrid. It involves the renovation of seven former Santander office buildings into a luxury complex containing a Four Seasons hotel, c. 20 high-end homes and a shopping arcade covering 9,000 m2. (…).

For this development, Villar Mir created a company in which its subsidiary Inmobiliaria Espacio owned a 75% stake, with the remaining 25% owned by OHL, which also assumed the roles of promoter, developer and construction company. The budget for the development was set at €500 million, an amount that the group was intending to fund in its entirety.

Nevertheless, problems with the group’s builder caused Villar Mir to propose the sale of a minority stake in the complex, amongst other divestments (…).

To accelerate this sale, Grupo Villar Mir engaged the real estate consultancy firm Colliers last September. A multitude of investors, from all sorts of backgrounds, were interested in the asset. In the end, the vendor opted for Scheinberg as a partner in its Madrilenian project. (…).

Project

The Canalejas Complex will open at the beginning of 2019, three and a half years later than planned, after work at the site was temporarily suspended due to differences in opinion regarding the conservation of the protected elements of the properties. (…).

Original story: Expansión (by Rocío Ruiz and Carlos Morán)

Translation: Carmel Drake