Azora Engages UBS to Prepare Its IPO

13 March 2018 – Expansión

Azora wants to take advantage of the investor appetite in the real estate sector and the euphoria on the stock market to make its public debut. The manager, led by Concha Osácar and Fernando Gumuzio, has engaged UBS to prepare its IPO, in an operation that will allow it to raise capital to invest in new assets.

With this move, the company seeks to create a portfolio, primarily, comprising hotels with properties both in Spain, as well as overseas, and to generate returns on the capital invested, taking advantage of opportunities in a bullish market, explain market sources speaking to Expansión.

As a next step, Azora will meet with analysts this week to explain its plans to them. Sources consulted at the manager limited themselves to indicating that the Board of Directors is considering different strategic alternatives, in addition to the creation of new private investment vehicles to accelerate its growth. “In this context, all of the options that would allow us to achieve the company’s objectives are being evaluated. Nevertheless, no specific decisions have been taken yet in this respect”, they add.

Azora has a long track record in the sector and experience in the stock market, given that it manages Hispania, the Socimi in which George Soros holds a stake, which made its stock market debut in March 2014. With more than 200 professionals, it has raised more than €2.2 billion in own funds and has €4.4 billion in assets under management. Specifically, in 2004, it launched its first investment vehicle, Lazora, to invest in homes and student halls in Spain.

Portfolio

The manager used to control, together with Corporación Financiera Alba, the leading operator in the student hall of residence market, Resa, before it sold it in September to a joint venture formed by AXA Investment Managers, CBRE GI and Greystar.

Lazora has become one of the leading specialists in rental housing in Spain with €1.6 billion in assets under management. In the office segment, Azora has invested in buildings in Spain, Poland and the Czech Republic, whilst in hotels, it manages €2.2 billion in assets.

With this move, Azora is set to join other groups that have made their stock market debuts in recent months, such as the property developers Neinor, Aedas and Metrovacesa, as well as those that are planning to do so in the near future, such as the property developer Vía Célere and the financial asset management firm Haya Real Estate.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Irea: Hotel Inv’t In H1 2017 Amounted To €1,655M

10 July 2017 – Reuters

Attracted by encouraging forecasts in the hotel sector, domestic and international investors alike purchased 79 hotels in Spain during the first six months of 20176, for a combined amount of €1,655 million, according to a report presented on Friday by the consultancy firm Irea.

The consultancy said that the figure for the first half of this year exceeds the volume recorded during the same period a year earlier by more than double and “should allow the sector to break the historical record for investment reached in 2015, when more than €2,600 million was spent”.

The strong interest in the hotel segment is being driven by a significant increase in hotel rates and sustained demand from tourists.

Spain received almost 28 million international tourists during the first five months of 2017, which represents an 11.6% increase compared to the first five months of last year, when foreign visitor numbers exceeded historical records for the second year in a row.

Spain received a record 75.5 million tourist visits in 2016 and Cehat forecasts that this year the figure will exceed the threshold of 80 million visitors.

According to Irea, investment in the hotel sector was split almost equally between the holiday segment (52%) and the urban segment (48%).

Two deals stood out in the urban sector during H1: the purchase of 55% of the Hilton Diagonal (4* – 433 rooms) by Axa Investment Managers and the acquisition of Hotel Silken Diagonal (4* – 240 rooms) by Benson Elliot and Highgate, both of which were closed for prices of more than €300,000 per room, said Irea.

Meanwhile, in the holiday segment, the star buy was London & Regional’s purchase of a portfolio of 4 hotels containing 2,050 rooms in total from Starwood and Melià, for an estimated amount of €240 million.

According to data from Spain’s National Institute of Statistics, there are 15,855 hotels in Spain, with a total of 822,002 rooms.

Of the 31.5 million overnight stays recorded in May (the latest figures available), 71.3% corresponded to foreign guests and the remaining 28.7% related to domestic customers.

The expectations of another record summer have boost hotel rates in recent months. According to the latest report from Trivago, hotel prices in Spain rose by 14% YoY on average in June to reach €134 per night.

Original story: Reuters

Translation: Carmel Drake

JLL: Hotel Inv’t Reaches Almost €5,000M In 2 Years

11 January 2017 – El Independiente

The tourist boom (which saw record numbers of tourist arrivals and a recovery in demand from Spanish clients) was followed by a boom in the hotel sector (with record occupancy rates and tariffs); and both have been supported by a boom in investment in hotel properties. With tourist activity at record highs and no signs of a slow down in sight, the purchase of hotel buildings has become a cushy deal for investors.

In two years, real estate investment in hotels in Spain has amounted to almost €5,000 million. Following a historical record in 2015, when operations were closed amounting to €2,650 million, last year, transactions were signed amounting to €2,155 million, the second best year ever, according to the latest report compiled by the consultancy firm JLL Hotels & Hospitality Group.

Several major operations have sustained the pace of investment. Just before the end of 2016, Merlin Properties sold off its hotel portfolio, transferring it to the fund Froncière des Règions for €535 million. The sale of the hotel Villa Magna de Madrid by Sodim SGPS to Dogus Group for €180 million represented a new national record in the price paid per room (€1.2 million per room, compared to €800,000 per room in the case of the Ritz in 2015, which had held the record since then).

Other large transactions included the sale by AXA Investment Managers of the Pullman Barcelona Skipper Hotel to Shaftesbury for €93 million; and the purchase of the historical headquarters of Caja Madrid by KKH Capital Group and Perella Weinberg RE for €80 million, which it will convert into a luxury hotel.

In total, investors purchased 130 hotel assets in Spain last year, in addition to the 143 hotels that they bought during the record year of 2015. Madrid led the ranking as the main location for investment, accounting for 28% of the total volume with €597 million. It was followed by Barcelona with €344 million (16%), despite the hotel moratorium declared by Ada Colau’s Town Hall, and Las Palmas (7.4%), Fuerteventura (7.4%), Málaga (7.4%), Valencia (7%) and Mallorca (6.1%).

Investments funds take over from the Socimis

During 2015, the major stars of the hotel investment segment by far were the Socimis (…), which accounted for almost €1,000 million of transactions during that year. But they have been replaced by investment funds, which have become the major players in the hotel investment market, accounting for 51.5% of total volumes.

The investment funds that have accounted for most of the transaction volume have been: Foncière des Régions, with 19 hotels and a total investment volume of €535 million; HI Partners, which has purchased eight assets for €200 million; KKH Capital Partners, which together with Perella Weinberg RE, bought the Celenque building for €80 million; and Internos Global Investors, which purchased Hotel Innside Madrid Suecia for €45 million.

According to JLL’s forecasts for 2017, the hotel investment market will continue to be active and investment volumes will remain similar to those seen in 2016, thanks to interest from international investors. The consultancy firm thinks that the requirement for owners to continuing to reduce the debt on their balance sheets, the strengthening of the strategy by national hotel chains to sell off properties and continue to operationally manage establishments, and the strong outlook for the tourist sector in general place the Spanish hotel market in the investor spotlight.

Original story: El Independiente (by David Page)

Translation: Carmel Drake