Hotel Investment Exceeds €1,000m In 2014

16 January 2015 – Expansión

Record year for hotel investment in Spain.

In 2014, 50 hotels including 8,861 rooms were bought and sold, an increase of 80% or €838 million on the previous year. Furthermore, €243 million was spent on the acquisition of 10 buildings in Madrid and Barcelona with the aim of converting them into hotels, mostly five star accommodation. Overall, total hotel investment rose by 37%, to €1,080 million, which represents not only a return to pre-crisis levels, but also the third greatest year-on-year increase of the last two decades, according to an in-depth market study conducted by the consultancy firm, Irea.

The holiday segment accounted for 59% of all transactions (€491 million), with a focus on three and four star hotels, which together represented 62% of the total volume. “The five star category, which has traditionally formed the core segment, declined in importance”, said Miguel Vázquez yesterday, the partner at Irea responsible for the hotel sector. In this respect, 2014 was a year in which single asset sales played a small role, with the exception of the sale of the Intercontinental Hotel in Madrid to the Qatari firm, Katara Hospitality.

The Balearic Islands, Madrid and Barcelona were the preferred regions for investors, who mainly acquired individual assets. Similarly, there was a significant increase in distressed transactions, as a result of financial problems for sellers, which accounted for 32% of all deals.

2014 was also an important year for transactions involving portfolios of hotel debt. Debt amounting to €1,003 million relating to 93 hotels was transferred in transactions with Octopus, Meridia and Amazona. Irea predicts that these types of operations will continue in 2015 and that the hotel investment figures may exceed those recorded in 2014.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

Bankia Sells Hotel-Backed Loans to Starwood & Sankaty For €400 Mn

7/10/2014 – El Confidencial

Starwood Capital and Sankaty outbid Cerberus at the bidding for Bankia’s hotel and logistics asset portfolio called Amazona. The investment funds paid about €400 million for the non-performing, real estate backed loans of a par value of €800 million.

Collaterals are mostly represented by hotels (27 establishments) but also by logistics and residential units said located in Catalonia, Madrid, Valencia and the Canaries. Looking closely to the assets, one comes across such noteworthy establishments as the 5-star, 250-room Gran Atlantis Bahia Real in Fuerteventura (pictured) or Hotel Mercure Santo Domingo, standing at the Gran Via street in Madrid.

The sale process was kick-started at the beginning of summer and in the meantime the third bidder, Fortress, withdrew its offer.

Thanks to the investment, Starwood Capital finally debuted on the Spanish real estate market as the firm has been scanning emerging opportunities for months. For instance, it took part in the Octopus project tender (by Eurohypo) but it was unsuccessful. The property fund has got considerable experience in the hotel sector acquired through its arm established in 2000, Starwood Hotels & Resorts.

The other buyer, Sankaty Advisors – the branch of Boston-based Bain Capital – has got six offices in the most important cities in the world and manages a €24 billion worth of real estate assets. In its March 2014 report, the company said that Spain had become the principal desire of international investors.

Cerberus has missed the chance to strengthen its position in the country. Back in July, the fund purchased the Sotogrande Hotel and was awarded management of REO assets of Bankia encompassed by its servicer Bankia Habitat.

 

Original article: El Confidencial (by Elena Sanz & Carlos Hernanz)

Translation: AURA REE