FTI Group to Convert Former Stella Canaris into Major Eco-Resort

14 October 2019 The Pájara City Council granted the FTI Group authorisation to start the renovation and conversion of the six hotels that make up the former Stella Canarias complex in ​​Solana Matorral, the Canary Islands. The FTI Group will invest approximately 200 million euros in converting the 4,000-bed complex into an eco-resort while creating some 600 jobs in the process. The needed infusion of capital into the island’s economy and its municipal coffers comes after the area has taken a series of hard hits, including the bankruptcies of Thomas Cook, Air Berlin and Germania Wings.

The municipal permits give the FTI Group twelve months to begin the construction though the firm announced that it would already begin in 2020. The FTI Group plans on turning former Stella Canaris, which is located in front of one of the best beaches in Jandía, into a major eco-resort.

Original Story: Canarias 7 – Catalina García

Adaptation/Translation: Richard D. K. Turner

Atom Hoteles Acquires Two Hotels in the Canary Islands for €68 Million

8 October 2019 The socimi Atom Hoteles, which is controlled by Bankinter and Global Myner Advisors Capital Investment, will undergo an €80-million capital increase to finance its acquisition of the 439-room Isla Bonita de Tenerife and the 125-room Riviera Marina de Gran Canaria hotels. The firm agreed to pay 52.6 million euros for the first hotel and 15 million euros for the second, for a total of €67.6 million.

Atom Hoteles also announced that it had reached an agreement with the FTI Group’s Meeting Point Hotel Managements to operate the two 4-star units under its Labranda Hotels & Resorts brand. Either party may opt to extend the 12.5-year lease. Meeting Point will pay 6% of each unit’s revenues in rent, with a minimum guaranteed amount of just over 6% of the acquisition price.

The agreement also stipulates that Meeting Point will invest approximately €25.6 million in the Isla Bonita hotel and approximately six million euros in the Riviera Marina hotel to upgrade and reposition the assets.

Original Story: La Vanguardia / Europa Press

Adaptation/Translation: Richard D. K. Turner

Blackstone’s Spanish Hotel Portfolio is Worth €3.5bn

3 June 2019 – La Vanguardia

In recent years, the US fund Blackstone has invested €3.5 billion in the Spanish hotel sector through its specialist manager HI Partners, making it the largest hotel owner in Spain and the third largest in Europe after the Swedish firm Pandox and the French group Covivio.

HI Partners was created four years ago and owned 17 establishments by the time Blackstone acquired it in 2017 for €640 million. A year later, the US fund launched a successful takeover bid for the Socimi Hispania, which gave it control of another 45 hotels.

According to Alejandro Hernández-Puértolas, Partner and CEO of HI Partners, the firm now owns 62 establishments in Spain, with around 18,000 rooms. By region, 53% of its rooms are located in the Canary Islands, where it has 25 establishments, 26% are in the Balearic Islands (18 hotels) and the remaining 21% are located across the Peninsula above all in the Costa del Sol, Valencia and Cataluña.

HI Partners is headquartered in Barcelona and has offices in the Canary and Balearic Islands. It employs 100 professionals and its hotels are managed by 19 different operators including Marriott, Barceló, Hilton, Melià and Ritz Carlton.

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

House Sales to Foreigners Fall Sharply in the Balearic and Canary Islands

13 May 2019 – El Confidencial

According to data from the General Council of Notaries, sales to foreigners fell by 15.3% in the Canary Islands and by 13.5% in the Balearic Islands during the second half of 2018, compared to the same period a year earlier. This is significant because overseas buyers currently account for almost 38.5% of sales in the Balearic Islands and 34% in the Canary Islands.

Several property developers have been feeling the pinch. Competition has increased a lot, above all in some local markets, and prices have risen in certain areas, due to a shortage of land and increased competition, which is deterring demand.

House purchases by foreigners have also been showing some signs of stagnation at the national level, with lower growth rates recorded in 2018. Foreigners closed 50,249 operations last year, which represented an increase of just 1.4% YoY.

The Brits are back

Despite the decreases, the most active buyers during H2 2018 were the Brits (15.3%), followed by other foreigners from outside the EU (12.1%) and then the French (8.0%), Germans (7.5%) and Romanians (7.1%). In the case of the British, it seems that the initial shock of the results of the Brexit referendum (which caused purchases by Brits to fall by 23.6% in H2 2016 and by 16.1% in H1 2017) has worn off.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Thomas Cook Signs a €51M Loan with CaixaBank to Finance Hotel Purchases

4 February 2019 – Hosteltur

Thomas Cook today announced that its joint venture with LMEY Investments, called Thomas Cook Hotel Investments (TCHI), has obtained a second round of financing amounting to €51 million thanks to an agreement with CaixaBank. The funds will be used to acquire hotels in Spain and the Mediterranean.

Thanks to that agreement, the joint venture’s funds to purchase hotels have increased by €91 million over the last three months, following the agreement signed with Piraeus Bank, according to reports from HostelTur news (…).

Those funds will be used to invest in opportunities that arise in Spain and the Mediterranean area. In fact, TCHI has also announced the acquisition of one 250-room hotel in the Canary Islands and another 300-room hotel in the Balearic Islands. In total, the seven hotels that the company currently owns represent assets worth €250 million and contain 2,200 rooms.

The fund has the objective of owning between 10 and 15 hotels over the next two years. A channel for more hotel acquisitions has been identified by the company and the team is focused on executing the expansion plan for the coming years.

TCHI was created in March 2018 to support the growth of the Thomas Cook’s own brand hotel portfolio as part of its strategy to take greater control over its hotel inventory and the customer experience (…).

Original story: Hosteltur 

Translation: Carmel Drake

Hotels Suffer from the First Decrease in Overnight Stays since 2012

24 January 2019 – Expansión

The record number of tourists registered in 2018 has not removed the bitter taste from the mouths of Spanish hoteliers, who are starting to suffer from symptoms that the sector is worn out. In 2018, Spanish hotels recorded the first decrease in the number of overnight stays in six years. A moderate decrease, of –0.1%, according to data from INE, but one that has not been seen since 2012, when Spain was in the midst of the financial crisis.

Spain is receiving more tourists than ever, and they are increasing their spending year on year, but they are also gradually reducing their average stay, and some of the demand is opting for alternative destinations, such as Turkey, which are competing on price, which is eroding the margins of many hotels at home (…).

According to data from Exceltur, Spain lost 21 million overnight stays in 2018, due to a decrease in the average stay. The boom in low-cost airlines, amongst other factors in the sector, has favoured the democratisation of tourism. Increasingly more people are travelling, but they are doing so for shorter periods. Whilst in 2008, the average stay was 9.4 days, it is now 7.4 days.

That change can be observed most easily amongst overseas tourists, who account for 65.8% of overnight stays and who decreased the number of nights spent in Spain by -0.4%, whereas domestic tourists increased their overnight stays by +0.4%.

The change in trend is being observed primarily in the traditional beach and sun markets, and in the most important months for the sector, in the height of the summer. In the Canary Islands, the primary destination for international tourists, accounting for almost one third of all overnight stays, visits by foreigners decreased by 3.6%(…).

According to explanations provided recently by the Head of Research at Exceltur, Óscar Perelli, these decreases reflect “the recovery of competitor countries”. Hotels, especially those on the beach, are being affected by competition in terms of prices from countries such as Turkey, Egypt and Tunisia. Those markets have recovered around 12 million tourists in recent years and they are still 20% below the levels they reached before their own crises (…).

Travellers from the United Kingdom and Germany account for 46% of all of the overnight stays made by non-resident visitors, and yet, there was a -0.9% decrease last year in the case of British tourists.

As a result, many hotels are trying to compete through promotional packages and cost reduction policies, and so prices barely increased in 2018. The Index of Hotel Prices from INE reflects a 1.5% increase in hotel tariffs, barely three decimal points above inflation for the year, making it the lowest rise in prices since 2013.

In terms of tourists who increased their hotel stays by the most, those who have to travel long distances, including visitors from the US (6.1%) are also the travellers who spend the most (€113 per tourist per day, compared with €98/tourist/day for those visiting from traditional markets), and so representatives in the sector recommend focusing promotional strategies to attract tourists from those countries.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

GGC Acquires El Mirador de Jinámar Shopping Centre for €45M

30 November 2018 – Eje Prime

General de Galerías Comerciales is now the owner of El Mirador de Jinámar. The Socimi led by the Murcian businessman Tomás Olivo has acquired the commercial complex located in the Canary Islands for €45 million. The company has been advised by Cushman & Wakefield during the operation.

El Mirador de Jinámar is the largest retail space in the Canary Islands. The asset has a total surface area of 50,000 m2, of which 11,300 m2 is dedicated to the first hypermarket that Eroski opened in the region. In fact, the Spanish supermarket chain is one of the drivers of the complex, together with the property developer Ambrosio Jiménez.

Since November 2010, the Mirador de Jinámar has housed a total of 120 establishments in its commercial area. Distributed over two floors, some of the tenants of the property include firms from the Inditex group, as well as H&M, Cortefiel and Primark (whose store exceeds 5,000 m2, making it the Irish company’s largest in the Canary Islands).

The complex is located in Jinámar, a neighbourhood located between the municipalities of Las Palmas de Gran Canaria and Telde, the two most important cities on the island. The complex also has a parking area with capacity for more than 40,000 vehicles. In a second phase, which is still pending, the centre is planning to expand its offer to include 45,000 m2 of additional space, which will be allocated to DIY and homeware firms (…).

Meanwhile, General de Galerías Comerciales made its debut on the Alternative Investment Market (MAB) in July 2017. The company has twenty years of experience undertaking its activity right across the value chain, from the purchase of land to the management of assets.

The main assets in its portfolio are retail parks and shopping centres in Spain, such as La Cañada (Marbella), Mediterráneo (Almería), Mataró Parc (Mataró), Gran Plaza (Almería), Las Dunas and Nevada Shopping (Granada). The company also has an extensive portfolio of residential assets and retail premises, as well as land, primarily in the south of Spain. When the company made its debut on the MAB, its portfolio of assets was worth €1.9 billion.

Original story: Eje Prime 

Translation: Carmel Drake

Construction Companies Look for Land in the Canary Islands for 2,000 Subsidised Homes

3 October 2018

The Association of Construction Companies is analysing Sareb’s real estate portfolio, which includes 2,900 properties on the Islands.

The builders are looking for land in the Canary Islands to finalise a “quick and complementary” housing plan before the end of the year that benefits the most disadvantaged segments of the population. The Association of Construction Companies and Developers of the Province of Las Palmas (AECP) met yesterday with a delegation from the Bank Restructuring Asset Management Company (Sareb), Spain’s so-called bad bank, to analyse the company’s assets on the Islands and potentially acquire the land necessary to follow through on their plan.

The president of the association, María de la Salud Gil, stated that the construction of some 2,000 subsidised homes, both for sale and for rent, is the goal of the initiative. “We have decided to develop a public-private housing policy and treat housing needs from a generalised perspective, creating a housing policy capable of serving every stratum of the population in function of their profiles,” she stated. For this, the builders are negotiating with different financial entities and developers to locate plots of land and “unfinished assets.”

Ms Gil explained before the meeting that the Government of the Canary Islands has full powers and jurisdiction in housing matters. “Therefore, it can structure procedurally agile rules and eliminate all the bureaucracy surrounding the creation of subsided housing.” She also stressed that housing and developments must attend three basic parameters: price per square meter, people who may buy or rent the properties and any support received by the interested parties.

Real estate assets

Sareb, which was formed in 2012, as a result of the nationalisation of four Spanish banks, has assets in the archipelago valued at 240 million euros. The portfolio is made up of some 2,900 properties, including land and housing, representing 2.5% of the company’s holdings in the country as a whole. Sareb has one thousand homes and 300 plots of land in Las Palmas, while it has 450 houses and 130 plots of land in Santa Cruz de Tenerife. The value of Sareb’s loans, which are secured by properties, is €550 million. In the Islands, the so-called bad bank has about 1,000 financial assets, representing 2% of the company’s total.

Ms Gil also explained that the development of subsidised housing is not linked with the construction of free housing or any size of homes. “It’s not just about building subsidised housing; it’s about addressing the housing market from a universal perspective,” she said. Even so, she explained that the association is trying to convince developers not to abandon subsidised housing because she believes that it helps “structure and balance the market and rental prices.”

Despite noting that the sector is currently held back by the delay in signing the pending state agreements, the president of the AECP stated that the construction industry already has “the muscle” to address the initiative.

Original Story: La Opinión de Tenerife – A. Rodríguez

Translation: Richard Turner

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

Savills & HomeAway: 60% of Second Homes are Bought to Let

17 September 2018 – Eje Prime

Buying a second home with the objective of putting it up for rent. Currently, that is the main reason why more than 60% of owners around the world acquire an asset of that kind, according to a study prepared by Savills and HomeAwayTM.

“In a low-interest rate environment, investors look for assets that generate income”, says Paul Tostevin, associate director at Savills and the person responsible for the report. The situation has changed in recent years, given that, for example, at the beginning of the 2000s, only 14% of second homes were purchased with the objective of letting them and not for personal use. During the credit crisis, that figure increased to 19%.

The average purchase price of a second home in the Spanish market was €245,000 in 2017. Nowadays, almost 40% of owners obtain profits from their properties and approximately 30% partially cover the expenses associated with the asset.

In terms of the location of the asset, less than 5% of the second homes owned by Spaniards are located overseas. The main regions where they do own second homes in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%). The increase in the arrival of international tourists in recent times has caused the owners of these homes to lease them more frequently to be able to obtain income.

In terms of the rest of Europe, the study reveals that Brits purchase the most second homes outside of their own country. Only 24% of their properties are located within the United Kingdom, 19% are located in France and 16% in Spain.

Original story: Eje Prime

Translation: Carmel Drake