Hispania’s Hotel Socimi Evaluates Potential New Partners

14 May 2015 – Cinco Días

Bay, the hotel vehicle created by Hispania and Barceló, wants to strengthen its growth. The Socimi, which specialises in the Spanish holiday hotel segment, is seeking to expand its assets and obtain a critical mass with which to debut, first on the MAB, and then on the main stock exchange.

The head of the hotel sector for Hispania, Javier Arús, has acknowledged that the Socimi is interested in continuing its purchase of assets in the Canary Islands, the Balearic Islands and on the coast. For the time being, the vehicle owns 11 hotels and 3,946 rooms, expandable to 2,151 more, as the result of an agreement with Barceló, which has required an investment of €421 million. According to Arús, this amount (of total investment) will have to increase to €1,000 million to ensure the appropriate “critical mass” for floatation on the stock exchange.

A few weeks ago, Hispania revealed that it had secured €545 million to invest in assets after completing a capital increase, which involved the accelerated placement of 27.53 million shares. This financial muscle will allow it to make the upcoming purchases amounting to €200 million that it announced recently. Within the hotel sector, Hispania announced in November that it was in the advanced stages of studying a transaction amounting to €40 million involving a hotel asset in the Canary Islands with 700 rooms.

At a conference about hotel investment in Spain organised by Garrigues and Cehat (la ‘Confederación Española de Hoteles y Alojamientos Turísticos’ or the ‘Spanish Confederation of Hotels and Tourist Accommodation’, Arús said that Bay is (currently) analysing the entry of family hotel groups, either through cash or hotel assets. “There is a huge opportunity to grow in (terms of the number of) rooms”, said the executive, who pointed to the possible scaling up of Bay’s model within the Spanish holiday segment.

The investment vehicle created by Hispania and Barceló expects to own assets managed by different operators, not just the Mallorcan group. In fact, Arús revealed that Barceló is not expected to operate the next few hotels that the Socimi acquires.

As well as creating the Socimi with Barceló last year (and taking a 80.5% controlling stake), Hispania purchased the Hotel Melia Jardines del Teide for €36 million, two NH hotels in Madrid for €42.15 million and the Hotel Guadalmina in Marbella for €21.5 million, as well as a hotel from the Vincci chain. The company has not ruled out transferring these assets to Bay during the second half of this year.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake