Tag: Dogus

Iberdrola Puts Hilton Diagonal Mar Hotel Up For Sale

21 March 2017 – Expansión

Iberdrola has hung the “for sale” sign up over the jewel in the crown of its real estate subsidiary: the building that houses the Hotel Hilton Diagonal Mar, a four-star property located at the intersection of Calles García Faria and Taulet, in the Barcelona neighbourhood of Diagonal Mar.

The company has contracted the real estate consultancy firm Irea to sell the asset, which has an asking price of more than €150 million, according to market sources.

These sources also indicate that the process will be restricted and that they will look to attract four or five candidates interested in acquiring the asset.

The building that houses the Hilton Diagonal Mar is the largest asset in the real estate subsidiary’s current portfolio, behind Torre Iberdrola in Bilbao, which is the corporate headquarters of the multinational company and is therefore strategic for the energy group and not susceptible to being sold.

Iberdrola’s real estate subsidiary has different types of assets in its portfolio, ranging from primary homes and tourist apartments, to offices, industrial warehouses and shopping centres. Currently, Iberdrola Inmobiliaria has a portfolio of real estate assets under management with a combined gross leasable area of more than 200,000 m2.

In Barcelona, the company owns the office buildings Torre Auditori and Torre Marina (in the final phases of construction).

The hotel now up for sale, work of the architect Oscar Tusquets and opened in 2005, was developed by the real estate subsidiary of Iberdrola.

Agreement with Hilton

Just before the construction work was completed, the company reached an agreement with Hilton whereby the hotel chain would take charge of the operation of the establishment for 20 years.

The Hilton Diagonal Mar has almost 420 rooms and around 20 suites, as well as multi-functional meeting rooms and a ballroom with capacity for 1,000 people. The building, which is oriented towards corporate events and conferences, is located opposite the Diagonal Mar shopping centre, a stone’s throw away from Barcelona’s International Convention Centre (CCIB) and 18 km from the airport.

Real estate investment in hotel assets returned to record figures in 2016. In this way, almost a quarter of all investment in commercial assets was linked to hotel assets.

Specifically, last year saw investment volumes of €2,200 million, the second highest amount ever recorded, thanks to a boost from some significant transactions, such as the sale of Merlin’s hotel portfolio – comprising 19 hotels and 3,645 rooms – to Foncière des Murs for €535 million. Likewise, last year, the Hotel Villa Magna was sold to the Turkish group Dogus for €180 million, in what is still the highest grossing operation to date in terms of price per room (€1.2 million), ahead of the almost €800,000 per room that was paid for the Hotel Ritz in 2015. (…).

Original story: Expansión (by R. Arroyo and M. Á. Patiño)

Translation: Carmel Drake

JLL: RE Inv’t Amounted To €8,757M In 2016

13 January 2017 – Expansión

Between January and December, investors spent €8,757 million buying tertiary assets, according to data from the real estate consultancy JLL. This figure is the second highest in the last decade, and is €650 million below the volume of sales and purchases recorded in 2015. That was the year when the invasion of international funds into Spain and the consolidation of the Socimis took the real estate market to figures never seen before, with a volume of investment upwards of €9,400 million.

But, unlike the previous year, 2016 saw the rise of commercial assets (primarily, shopping centres and high street premises) to lead the ranking in terms of real estate investment by segment, accounting for almost €3,000 million (€2,977 million, according to JLL) compared to €2,806 million spent on offices.

Two operations, the purchase of Torre Foster by Amancio Ortega, for €490 million and Merlin’s acquisition of Parque Adequa for €380 million, boosted the investment figure in the office segment, which, although hasn’t completely lost its appeal for buyers, has been relegated to second place due to a shortage of available prime space. (…).

Funds are selling off assets

The opposite is happening in the case of large commercial establishments. International funds’ interest in selling the properties that they bought during the crisis led to a boom in major operations last year, including the sale of the Diagonal Mar shopping centre by Northwood, which was acquired by one of Deutsche Bank’s real estate funds for €493 million; and the sale of Gran Vía de Vigo, for which the Socimi Lar España paid the fund Oaktree €145 million. (…).

In the case of hotels, despite significant one-off sales, such as the operation involving Hotel Villamagna, which was acquired by the Turkish group Dogus for €180 million, overall the investment volume fell from €2,739 million in 2015 to €2,155 million last year. Even so, the figure for 2016 exceeds the investment volume recorded in 2006, which previously held the record, when hotel sales amounted to €1,600 million (out of a total non-residential investment volume of €8,482 million).

Although commercial properties led the ranking as the preferred asset for investors, logistics assets also performed very well. Between January and December, €819 million was invested in logistics warehouses, platforms and centres, according to JLL. This figure practically doubles the purchases completed in 2015, when investors disbursed €434 million on these types of properties, according to the consultancy.

The key behind this success is due to the fact that logistics assets still offer high returns, compared with other properties, such as offices and shopping centres, which have lost some of their investment appeal, due to the high degree of interest in these assets in Spain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

JLL: Hotel Inv’t Amounted To €1,030M In First 7M 2016

3 August 2016 – Expansión

(…). Hotel investment in Spain amounted to €1,030 million during the 7 months to July 2016, which represents a 41% decrease compared with the same period last year. Nevertheless, it also represents the second highest figure recorded since 2007, according to a report prepared by JLL.

Specifically, as at 31 July this year, 81 (hotel) assets had been sold, for a combined investment volume of €1,030 million through 68 operations, compared with 92 assets sold as at July last year, with a combined investment volume of €1,752 million through 55 operations.

The most noteworthy operations so far this year have featured: Hotel Villa Magna, which was acquired by the Turkish group Dogus for an estimated €180 million; and Hotel Pullman Barcelona Skipper, which was purchased by the Saudí Royal Family for €90 million.

Excluding those two operations, Spanish investors accounted for 80% of the total volume invested in Spain.

In this vein, the most active investors in the hotel market have been the investment fund HI Partners (a subsidiary of Sabadell) and Hispania, which have completed transactions amounting to €110 million and €71 million, respectively.

Meanwhile, on the sell side, hotel groups have accounted for 41% of all hotel assets sold, followed by real estate companies (26%) and private investors (13%).

For Manuel Climent, Vice-President of JLL Hotels & Hospitality Group, the decrease in investment this year reflects, in part, the lower number of hotel portfolio transactions sold this year, after they soared in Spain in 2015.

Specifically, last year, up to eleven portfolios were sold, containing 74 hotels in total, for a combined investment volume of €1,450 million. So far this year, seven portfolios have been sold, containing 21 hotels and a combined investment of €174 million.

Climent forecasts that activity will intensify in terms of hotel portfolio transactions during the second half of the year, with HI Partners and Hispania leading the way.

For Climent, the moratorium in Barcelona has caused lots of investors who had purchased assets with a view to converting them into hotels, to become more cautious again. By contrast, some owners have put their hotel assets up for sale as they think that now is a good time to sell, given the lack of supply, which is raising prices in a space that is still very attractive for tourism.

The Vice-President of JLL Hotels & Hospitality Group considers that, although some important transactions are expected to be closed before year end, total investment volumes will fall below last year’s record of €2,740 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

BBVA’s Turkish Partner Buys Hotel Villa Magna For €180M

6 March 2016 – Expansión

Another transaction has been closed in the five-star hotel sector in Madrid. Following the sales of the InterContinental and the Ritz, now Hotel Villa Magna is changing hands. Sodim, the Holding company owned by the Portuguese family Queiroz Pereira, has sold the hotel to the Turkish group Dogus, who will pay €180 million.

Sodim, which has been advised by JLL, has completed the operation that it launched at the beginning of 2015 and which it almost closed half way through last year with the Colombian investor Jaime Gilinksi as the buyer. In the end, the deal with Sabadell’s largest shareholder was suspended because of financing problems, which forced Sodim to make contact with other interested investors and delay the transaction close.

Price

The price agreed by Dogus is slightly lower than the amount agreed with Gilinski – €190 million – but it represents the minimum amount that Sodim set when it launched the process. The Portuguese Holding company paid the Japanese firm Shirayama €80 million for the property in 2001. Years later, Sodim closed the hotel, which is located on the Paseo de la Castellana, to modernise the facilities, involving expenditure of around €50 million. The construction work did not alter the building’s distinctive pink granite façade, but it did reduce the number of rooms down from 182 to 150, as well as increase the number of suites from 18 to 50. In 2009, when the hotel was reopened, Sodim decided to take over the management of the hotel, as it had already done with the Ritz in Lisbon, and it dispensed with Hyatt, which had operated the property for almost two decades.

Brand

Despite the change of ownership, the operating structure may be maintained, given that, according to market sources, the intention of Dogus is to operate the hotel by itself, without involving any international brands, which would somewhat ruin the intentions of Marriott and Starwood, who were negotiating with Gilinksi to take over the management of the hotel.

Dogus is a giant that comprises more than 250 companies and employs 50,000 people. It is BBVA’s partner in Garanti bank. The group, controlled by the Sahenk family, sold a 15% stake in Garanti to the bank led by Francisco González in July 2015 for €1,854 million, which increased BBVA’s shareholding to 39.9% and turned it into Garanti’s largest shareholder.

Founded in 1951, Dogus has interests in the financial, automobile, energy, real estate and tourism sectors, amongst others. The group, which is listed on the Istanbul stock exchange, imports and distributes vehicles from brands such as Volkswagen, Seat and Audi, amongst others. Around 74% of its revenues are generated by the automobile sector.

In 2014, Dogus recorded revenues of €3,231 million. Its tourism division comprises a travel agency and eight luxury hotels – five of which it owns. Some, such as the Park Hyatt and the Grand Hyatt in Instanbul are managed by an international brand. (…).

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake