5 June 2017 – Expansión
The Socimi, managed by Azora and in which George Soros holds a stake, debuted on the stock market in March 2014, with the aim of raising funds with which to buy assets over a three-year period and to improve them.
For the next three years, it planned to focus on managing those assets, with a view to selling them all before March 2020 in order to ensure that its shareholders made profits on their investments
Now, this plan will continue for some of its current portfolio, specifically, for its rental homes (worth around €230 million) and offices (around €520 million), whereas for its hotel assets (more than €1,200 million), “it now makes the most sense for us to change shareholders”, explained the Director General of Hispania and Director of Corporate Development at Azora, Cristina García-Peri.
The idea of selling the assets, making cash and distributing it with a large dividend made sense where we were dealing with diverse assets, but nowadays 70% of Hispania’s portfolio “is worth more together than separate”, she said.
For this reason, the Socimi is going to divest its residential rental assets, homes that it is selling off one by one, and the 25 office buildings that it holds in Madrid and Barcelona.
The gross value of those offices amounts to €520 million although, it is likely that the sales price will be higher because the company has received indicative offers for values that exceed that figure, said García-Peri, who highlighted that these types of assets are still proving to be “very attractive” because rental prices are rising and interest rates are still low.
In terms of its hotels, Hispania, which currently owns 37 establishments, will continue buying new units until the end of the year, given that its shareholders decided that the acquisitions should continue beyond March, the deadline that had been set initially.
“We are looking at block operations as well as certain individual deals”, explained the Director at Hispania, who said that they are continuing to focus on vacation hotels where international clients predominate.
“We have a fantastic portfolio in a very powerful industry, which has a lot of potential to keep growing. It is a product that allows us to diversify”, she added.
García-Peri underlined that, for this reason, bringing about a change of control is now the most “efficient” option for the current shareholders.
The Director said that she doesn’t know whether any of Hispania’s current shareholders will continue with the company beyond 2020. She also discounted the possibility that any hotel group could be interested in buying Hispania’s assets because many of the establishments are managed by operators with lease contracts that span more than ten years.
“We have created an alternative portfolio, with a product that is very well understood”, highlighted García-Peri, who confirmed that Azora will continue investing in hotels, “without a doubt”, both in Spain and overseas, and that it may continue managing Hispania beyond 2020, if the new shareholders so wish.
Currently, Hispania’s major shareholders include Soros Fund Management (16.678%) and FMR (7.589%).
Original story: Expansión
Translation: Carmel Drake