Hotel Miguel Ángel’s Socimi Will Debut On The MAB In 2017

5 October 2016 – Expansión

This iconic asset will form part of the Socimi created as a result of the alliance between the hotel group BlueBay and Le Royal Hotels & Resorts, which is due to debut on the Alternative Investment Market (MAB) during the first quarter of 2017.

In addition to Hotel Miguel Ángel, the Socimi will initially comprise other hotels located in Mallorca and a commercial development project on the Costa del Sol. In the absence of the opinion of an independent expert, first estimates indicate that the Socimi will be worth around €500 million.

The company has already engaged Armabex to prepare the informative document for joining the market. That firm will act as the global coordinator, alongside PwC, throughout the process.

The contribution of the hotel, which is owned by the Iraqi born British investor Nadhmi Auchi, who owns Le Royal Hotels & Resorts, has been carried out through a company restructuring process performed, primarily, using local companies and entities in Luxembourg.

New assets

“Although during the first phase, assets such as Hotel Miguel Ángel by BlueBay, some hotels in Mallorca and a commercial development on the Costa del Sol, including a hotel, will be included, the group will subsequently incorporate more properties, as a result of the asset restructuring process in commercial, fiscal and corporate terms, as well as due to the purchase of new assets”, explained the Chairman of BlueBay Hotels, Jamal Satli Iglesias in an interview. “The Socimi will be managed from Dubai, where I live, which will enable us to service different investors from the Middle East and London, for the other international investors”, said the Syrian-born Spanish businessman.

For the executive, the constitution of this Socimi forms part of a corporate strategy through which, in line with the actions of other international hotel chains, he wants to separate out the asset ownership and the operational sides of the business. “With this, we are looking for growth and consolidation”.

Amongst the benefits of this Socimi, Satli Iglesias highlights its significant diversification, both in terms of properties as well as lease contracts, which allows it to expect “very attractive returns, which will continue to increase over the next few years, driven by growth in the real estate sector and by the forecast growth in the tourism sector”.

Satli Iglesias said that this operation seeks to obtain “transparency and returns”. “During this first phase, we are more open to the entry of institutional investors and other hotel chains or hotel property owners who may want to join our project”.

BlueBay – the fifteenth largest hotel company in Spain – currently has 42 hotels in its portfolio, of which it owns 50%. “We are committed to a hotel management regime, backed by property ownership, and our future strategy is to increase the number of hotels that we manage under this structure”, he explained.

“Our strategic plan for 2017-2020, which we have just presented, involves increasing our current hotel supply by almost 50% to exceed 60 hotels by the end of the period. In terms of the number of beds, we expect the figure to double from its current level (23,000 beds) to more than 50,000 beds by 2020”, said the executive.

Satli Iglesias explained that in order to undertake these expansion plans, the group plans to allocate around 80% of the company’s profits to growth.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hotel Socimis Get Ready To Invade The MAB

16 March 2016 – Cinco Días

Hotel Socimis are getting ready to colonise the Alternative Investment Market (MAB). Hotel chains of all sizes are analysing this vehicle in light of the tax incentives that it offers. More than six companies are already working on their debuts.

Bay, the vehicle created by Hispania and Barcelona, fired the starting gun in the hotel Socimi race. Socimis are vehicles whose activity involves real estate investment, and they also offer tax incentives for investors. “This year, the hotel Socimis will position themselves in the market, with urban properties and holiday resorts”, says Bruno Hallé, Managing Partner at the consultancy firm Magma Hospitality, who highlights the appeal that the Spanish hotel industry holds for both foreign travellers and investors.

The vehicle is being analysed by hotel groups of all sizes (small, medium and large) that have a lot of real estate on their balance sheets and that view this option as an alternative for obtaining liquidity and continuing with their growth strategies, as well as of separating their hotel activity out from their assets. In the case of Bay, it owns a portfolio of 16 vacation hotels, which also includes two shopping centres. That Socimi will soon debut on the MAB.

For other Socimis, the MAB has also become the launch pad. Of the 15 Socimis now operating on that platform, three are hotel companies: Obsido, Trajano and Promorent, and another six such companies are planned over the next few months.

“The Socimi is a vehicle that anyone working in the real estate sector has to consider”, says Antonio Fernández Hernando, President of Armabex, one of the registered advisors to the MAB that specialises in Socimis. It is currently promoting Bluebay, the hotel chain owned by Jamal Satli Iglesias, which has been managing the Hotel Miguel Ángel in Madrid for the last few months. Sources at the hotel group acknowledge that no specific decisions have been taken yet about the assets that are going to be incorporated into this vehicle, but according to estimates, it will have a value of between €450 million and €500 million.

The valuation of the most urgent project that Armabex is working on is much smaller. It will have just one hotel, in the North of Spain, and is owned by a family group, which also plans to launch another vehicle of this type with another four properties.

Behind them is a list of projects under consideration, including one that Antonio Fernández Hernando says has an initial valuation of €150 million.

Among the investors who have realised their plans to launch pure hotel Socimis is Millenium. The group, chaired by Javier Illán, is evaluating the option of creating a hotel Socimi and has set an investment objective of €300 million, which could increase to €500 million, in both the holiday and urban segments.

Besides the Socimis, another alternative preferred by hotel groups in recent years has been the creation of joint ventures with investment firms. Such is the case of Meliá, which launched a company with Starwood Capital, to which it sold a portfolio of six properties for €176 million. “The future of the Socimis will involve the creation of multi-brand vehicles, like the ones that already exist in the US”, says Hallé, who acknowledges that the sector is in its infancy and will become more established over the next few years.

Original story: Cinco Días (by Laura Salces Acebes and Pablo Martín Simón)

Translation: Carmel Drake

AC, Hesperia, Piñero And BlueBay All Plan To Launch Socimis

9 February 2016 – Expansion

Following the success of Barcelo and Bay, more and more chains are in the study of creating a listed vehicle and separate property assets from hotel management to reduce risk and free up resources.

Despite the negative start in the stock markets, 2016 could be the year of hotel Socimis. The alliance between Barceló and Hispania to create the listed investment vehicle “Bay”, together with the interest of investors in the hotel sector in the heat of the tourist boom and the recovery of the Spanish demand, have encouraged BlueBay, AC, Hesperia and Grupo Piñero to launch their own Socimis.

In the case of Blue Bay, the plan is well underway and its Socimi could debut on the floor in the first half with four hotels in the Balearic Islands and one in “Costa del Sol“, and a value of between EUR 150 and 250 million. As Antonio Fernandez, Chairman of Armabex and registered adviser in the operation, “the operation of Barceló and Hispania has made both large chains and small and medium-sized family companies reflect.” 
According to Fernandez, “This is the time of hotels, due to real estate valuations, the liquidity in the market and the type of asset. Since they operate with a lease contract, you can capture some of that value as investment. And he adds: “In the coming years, no properties will be sold, but the SOCIMIs themselves”.

So far, the focus of hotel SOCIMIs has been the holiday segment, taking advantage of the excellent moment in tourism – Spain received more than 68 million foreign visitors in 2015 – and visibility, as the resort hotels have signed contracts of several years with tour operators. Thus, all hotels that Barceló transfered to Bay and with which Bluebay will create its Socimi are spread between the Balearic Islands and Andalusia. 
However, this trend might change in the medium term, with the first purely urban hotel Socimis. Meridia Capital works in this line, which could give the shape of Socimi to its fourth fund. The new vehicle specializes in city hotels, located in Madrid and Barcelona and will combine establishments of several chains. The project of Meridia Capital could open a window of opportunity to Hesperia Investment Group and AC, which are also analyzing the creation of their listed vehicle.

Hesperia, an NH shareholder, tried to sell a batch of six hotels during the crisis and transferring the property it would obtain funds to reduce its debt while maintaining the management of the establishments.

This is one of the great advantages for hotel companies. However, in the case of Meliá, the formula has been discarded because the Socimi forces to sign a lease contract and the Escarrer family´s chain guides its growth strategy via management. Nor is it in NH´s radar, since after progressive output deals in recent years, IT only has 13 owned hotels in Spain – out of a total of 79 – including Eurobuilding Madrid or Calderón Barcelona.

By contrast, it does have the door open to replicate the formula in other countries like Mexico – where the equivalent are the fibers, and Greece, but so far these projects have slowed. Likewise, Room Mate chain led by Enrique Sarasola, is planning to ally with a Socimi – in this case, it does not have owned hotels, but simply manage them, or a Reit – as these types of vehicles are known in the US, to boost their growth. In addition to the tax advantages and the distribution of at least 90% of income in dividends for investors, Socimis are a funding formula and make expansion – Barceló used the funds raised with Bay to purchase “Occidental” – and succession in family businesses easier.

Original story: Expansion (by Yovanna Blanco)

Translation: Aura Ree

Hilton To Open Hotel In Centre Of Madrid

11 November 2015 – Expansión

The US giant is set to debut its Double Tree brand in the heart of the capital, with a 61-room hotel on Calle San Agustín, which the Pérez Gil family will manage under a franchise agreement.

Hilton is joining the hotel battle in the centre of Madrid. The US group will debut its Double Tree brand in Madrid in 2016, with a hotel in the tourist centre of the capital.

Specifically, it will open a hotel in a building that currently houses offices on Calle San Agustín, Madrid. This building is owned by the Pérez Gil family, which also owns several other hotels in Madrid. The owner will take responsibility for the renovation of the building and will manage the four-star hotel under a franchise agreement.

Hilton, whose only presence in the capital until now has been near the airport, is moving into the centre to compete against Four Seasons and Mandarín, which are preparing to open hotels of their own in the Canalejas complex and in the Ritz, respectively. The US chain also participated in the bid to manage the Hotel Miguel Angel, but in the end that contract was awarded to Bluebay.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

BlueBay Signs JV With Nadhmi Auchi To Operate Hotel Miguel Angel

18 September 2015 – Cinco Días

The Madrilenian Hotel Miguel Angel is going to be operated by a prestigious player once more, but not one that has a significant international presence. The hotel chain BlueBay will manage the property from now on, after it reached an agreement with the owner, the Iraqui born Briton Nadhmi Auchi, who has been running the hotel since December 2013, when Occidental Hoteles departed, whereby putting an end to its operations in Spain.

All of the international hotel chains have had their eyes on Hotel Miguel Angel, amongst others, since the Four Seasons announced its arrival in Madrid, in the Canalejas complex, and Mandarin announced its acquisition of the Ritz. In the end, the Spanish firm BlueBay, owned by investor Jamal Satli Iglesias, will take over the management of the property, which has 267 rooms, under an agreement that will involve the creation of a joint venture between BlueBay and Nadhmi Auchi. Together, they will invest around €35 million on the refurbishment. The renovation will be completed over the next few months and will involve the creation of new facilities and the expansion of the gastronomic offer, according to the chain, which aims to convert the hotel into “one of the most emblematic luxury, 5-star establishments in the city and in Spain”, said the CEO of BlueBay, Joaquín Janer.

This operation is BlueBay’s first foray into Madrid – traditionally, the company has a strong presences in the holiday hotel market, but not in the city hotel segment – it owns one 3-star hotel in Barcelona and two hotels in Mérida (one 5-star and one 4-star). BlueBay’s portfolio contains 52 properties across 27 locations. It will soon add eight more assets as a result of its international expansion, which will take place in the Middle East, Latin America and Europe. In April, it announced its expansion into Morocco and it plans to start constructing four hotels in Brazil this quarter.

In Spain, BlueBay is also working to open two other properties, in Marbella and Estepona, in 2018, which will require an investment of around €100 million. The chain, founded in 1976, operates six brands, including the urban specialist BlueCity. The brand used to be owned by Marsans, but following that company’s bankruptcy in December 2009, the businessman Jamal Satli Iglesias acquired it from Posibilitum, in an operation that included the management of 11 hotels. Satli Iglesias also holds a stake in Málaga Football Club, through which he has a dispute pending with its chairman, Abdullah Al Thani.

Renovation of Madrid’s luxury hotels

The refurbishment of Miguel Angel will represent a new boost for the 5-star segment in the capital, following the arrival of Four Seasons, which resulted in a “pull effect” in Madrid for other major international operators. During this time, Mandarin joined forces with the Olayan Group to purchase the Ritz. Despite this, the city’s hotel market is still missing companies such as Hyatt, Kempiski, Hilton, W and Shangri-La, although the details of the Wanda group’s plans for its hotel project at Edificio España have not yet been revealed. One of the most tempting properties for investors and operators over the coming months will inevitably be the Villa Magna, whose owner rejected a purchase offer from Jaime Gilinski in August for €190 million, and the (Westin) Palace. The owners of the latter have set a sales price of €330 million for the establishment.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake