• Transaction / Assets
  • Seller
  • Buyer
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BBVA’s Turkish Partner Buys Hotel Villa Magna For €180M

6 March 2016 – Expansión

Another transaction has been closed in the five-star hotel sector in Madrid. Following the sales of the InterContinental and the Ritz, now Hotel Villa Magna is changing hands. Sodim, the Holding company owned by the Portuguese family Queiroz Pereira, has sold the hotel to the Turkish group Dogus, who will pay €180 million.

Sodim, which has been advised by JLL, has completed the operation that it launched at the beginning of 2015 and which it almost closed half way through last year with the Colombian investor Jaime Gilinksi as the buyer. In the end, the deal with Sabadell’s largest shareholder was suspended because of financing problems, which forced Sodim to make contact with other interested investors and delay the transaction close.

Price

The price agreed by Dogus is slightly lower than the amount agreed with Gilinski – €190 million – but it represents the minimum amount that Sodim set when it launched the process. The Portuguese Holding company paid the Japanese firm Shirayama €80 million for the property in 2001. Years later, Sodim closed the hotel, which is located on the Paseo de la Castellana, to modernise the facilities, involving expenditure of around €50 million. The construction work did not alter the building’s distinctive pink granite façade, but it did reduce the number of rooms down from 182 to 150, as well as increase the number of suites from 18 to 50. In 2009, when the hotel was reopened, Sodim decided to take over the management of the hotel, as it had already done with the Ritz in Lisbon, and it dispensed with Hyatt, which had operated the property for almost two decades.

Brand

Despite the change of ownership, the operating structure may be maintained, given that, according to market sources, the intention of Dogus is to operate the hotel by itself, without involving any international brands, which would somewhat ruin the intentions of Marriott and Starwood, who were negotiating with Gilinksi to take over the management of the hotel.

Dogus is a giant that comprises more than 250 companies and employs 50,000 people. It is BBVA’s partner in Garanti bank. The group, controlled by the Sahenk family, sold a 15% stake in Garanti to the bank led by Francisco González in July 2015 for €1,854 million, which increased BBVA’s shareholding to 39.9% and turned it into Garanti’s largest shareholder.

Founded in 1951, Dogus has interests in the financial, automobile, energy, real estate and tourism sectors, amongst others. The group, which is listed on the Istanbul stock exchange, imports and distributes vehicles from brands such as Volkswagen, Seat and Audi, amongst others. Around 74% of its revenues are generated by the automobile sector.

In 2014, Dogus recorded revenues of €3,231 million. Its tourism division comprises a travel agency and eight luxury hotels – five of which it owns. Some, such as the Park Hyatt and the Grand Hyatt in Instanbul are managed by an international brand. (…).

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

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