Hotel Activity in Spain Slows Down in July

25 August 2018

Overnight stays in Spain fell by more than 2% last month. The recovery of the tourist sector in other countries looks set to prevent the industry from reaching a new annual record.

Executives and experts from the tourism sector predicted that the passenger and occupancy records set in 2017 are unlikely to be repeated, at least for the hotel sector. Overnight stays in hotels fell by 2.2% in July compared to the year before, reaching 42.6 million stays, according to data released yesterday by the National Institute of Statistics (INE).

There was a noted reduction in both stays by Spanish tourists and those of foreigners, decreasing by 1.1% and 2.7%, respectively, in this high-summer month. On the other hand, hotels in Spain charged an average of 101 euros per occupied room, an annual increase of 3.1%, according to the same source. At the end of the season, despite the fall in overnight stays, Spain’s hotels are expected to have revenues that are broadly similar to those of the year before.

The president of the Spanish Confederation of Hotels and Tourist Accommodations (Cehat), Joan Molas, stated that the decrease had been expected and had already been noted in the previous months. This is partly because many competing tourist destinations have started recovering, leading them to attract many of the same customers who tend to visit Spain: tourists from the United Kingdom and Germany.

Josep Francesc Valls, a professor, specialising in tourism at Esade, does not believe that the figure for July is necessarily negative. “It was expected because the tourist activity in Spain had been growing due to endogenous causes that would be reversed at some point, and that is what is happening now.” The important thing, according to Valls, is the average cost, which is continuing its upward trajectory.

The two main markets, the United Kingdom and Germany, which jointly account for almost half of demand, saw overnight stays fall by 2.5% and 11.4%, respectively. During the first seven months of the year, the total number of overnight stays went down by 0.7% compared to the same period last year. In July, hotel occupancy also fell, reaching 71.1% of the total availability, a fall of 2.4% in relation to the same month of 2017.

Baleares, the Chosen Destination

The Baleares had the highest occupancy rate in July, at 89.5%; followed by the Canary Islands (80.7%) and Valencia (74%). Baleares was also the main destination for non-resident travellers in Spain, with 35% of the total number of overnight stays, increasing by 1.1% in comparison to July 2017.

Catalonia followed with 20.7% of the total, though overnight stays by foreigners fell by 6.2%. The most significant drop occurred in the province of Tarragona where the total number of travellers fell by 12% along with overnight stays. The biggest drop was by foreign travellers, down 17% compared to July 2017. Despite this, Molas stressed that with the available data on reservations for September point to a hotel occupancy similar to that of last year, with a clear recovery in the British, German, Belgian and Dutch markets.

The decrease in travellers and overnight stays in hotels in July contrasts with the record number of passengers registered in the same period in several airports. For the hotel manager, Joan Molas, this discrepancy confirms an increase in the use of illegal tourist flats.

Original Story: El Periódico de Aragón – Salvador Sabriá

Translation: Richard Turner

 

Without Secessionist Threat, Merlin Would Invest Twice As Much In Barcelona

16 June 2017 – Expansión

The President of Merlin Properties, Ismael Clemente (pictured above), confirmed yesterday that his Socimi would invest “twice as much in Cataluña in the absence of the political instability there”. “Our investments in Barcelona account for 16% of the total at the moment, but we could invest up to 30%”, he said. However “the types of political movements based on superiority do not create any kind of sympathy amongst investors”, he added, and so “we are not able to invest as much as we would like to in Cataluña”.

Regarding the reactions that international investors – including some of Merlin’s shareholders – have had to the political problems in Cataluña, Clemente said that “there is no kind of sympathy for the topic” and that “if the (Spanish) Government were to give a more definite reaction, both the international investor community and the Ibex 35 would applaud it”.

Clemente, who participated yesterday in the Annual Meeting of the Esade Alumni Real Estate Club, in Barcelona, said that the Catalan sovereign process may also affect the city’s candidacy to host the European Medicines Agency. “The project has a lot of potential, the coordination between the administrations is exemplary and the proposal is spectacular, but Barcelona has a gigantic problem, the political issue”, he added.

Context

Ismael Clemente shared the discussion table with Colonial’s CEO, Pere Viñolas. They addressed issues such as the change in the cycle of some international real estate markets. “The deceleration in London and New York may have a limited impact here, but Spain will continue to grow and at a faster rate than other European economies”, said Clemente. Viñolas added that the only approach is “to focus on industrial added value because it is the only margin that we can work with”.

Original story: Expansión (Marisa Anglés)

Translation: Carmel Drake

Albirana: New Rental Housing Socimi Will Debut On MAB On 22 March

21 March 2017 – Expansión

Albirana, the rental housing Socimi controlled by investment funds advised by Blackstone, will start to trade on the Alternative Investment Market (MAB) on 22 March at €33.60 per share, a price that values the company at €168 million, according to the BME.

The company, in turn, owns three Socimi subsidiaries that manage a portfolio of 5,004 properties – mainly homes for rent – located primarily in Madrid and Barcelona.

They also have properties for rent in other cities such as Tarragona, Valencia, Girona, Zaragoza, Logroño, Vitoria, Mérida and Cuenca.

The assets have a combined surface area of around 400,000 m2 and 68% of them are currently leased out, according to sources at Anticipa, which will be responsible for managing the Socimi. In fact, Anticipa already manages the three subsidiaries that comprise Albirana, given that it handles Blackstone’s investments in Spain.

Specifically, Albirana controls the Socimi Budmac Investment, which channels 3,039 homes for rent in the province of Barcelona, as well as Lambeo Investment, which owns 377 flats in Madrid, and Treaman Investment, which manages the 1,588 homes across the rest of the country.

Strategy

The company’s strategy focuses on managing this portfolio of homes to “maximise returns for shareholders”, however, it is “open to analysing any possible investment or divestment opportunities in the market”, according to information provided in its IPO leaflet.

Albirana is chaired by Anticipa in the form of its CEO since 2014, Eduardo Mendiluce Fradera, a professional with more than twenty years of experience in the real estate and financial sectors.

Mendiluce also chairs Esade Alumni Inmobiliario and is a member of theExecutive Committee at the Urban Land Institute in Barcelona.

The new Socimi is the thirty-second entity of its kind to debut on the MAB, where it will trade under the ticker ‘YAPS’. Its shares will be traded through the price fixing system.

Original story: Expansión

Translation: Carmel Drake

Former SARquavitae Director Creates Fund With Oaktree

1 December 2016 – Expansión

The former CEO of SARquavitae, Jorge Guarner, has joined forces with Oaktree Capital to launch a new fund, Healthcare Activos, an investment vehicle specialising in real estate assets in the healthcare sector. The fund has a minimum size of €100 million, according to sources in the sector.

Healthcare Activos, which is headquartered in Barcelona, places its focus on acquiring real estate assets such as hospitals, clinics and other medical centres, both in Spain and overseas. The vehicle has not made any purchases to date.

The project is led by Guarner, who served as the CEO and Director General of the nursing home and services group between 2003 and 2015.

Guarner is an expert in the field of healthcare. He is currently a Director of the group Confide Correduría and a partner at the international consultancy firm Sphera Global Healthcare. At a more institutional level, he is a member of the Board of Directors of the Spanish Association of Directors and a member of the advisory board for Esade’s Health and Pharmacy Club. Meanwhile, Oaktree is a fund that has starred in several major operations in Spain, such as the sale of Panrico to Bimbo.

The Board of Directors of Healthcase Activos includes Guarner as the Chairman; Karim Khairallah as the Director General of the investor group; and Carlos Gila as the expert in business restructurings. Sergio Sánchez Solé, a lawyer from Garrigues, has been appointed as the Secretary to the Board.

Original story: Expansión (by G. Trindade)

Translation: Carmel Drake

Demand For Rental Housing Will Soon Exceed 500,000

19 May 2016 – El Mundo

Demand for rental housing from the population cohort aged between 20 and 39 will exceed half a million within the next few years in Spain, in a market in which 15% of homes are already occupied on a rental basis.

That was one of the findings from the XVII Annual Meeting of Esade Alumni’s Real Estate Club, which focused on the residential rental market in Spain and Europe and its viability from the point of view of operations, financing and capital markets. The meeting was attended by more than 150 specialists from the real estate sector.

The President of Esade Alumni’s Real Estate Club, Eduard Mendiluce, said that residential rental properties represent “an investment in the future” and he made reference to the business models that operate in other European countries, where a couple of companies manage stocks of 200,000 and 300,000 homes.

Eduard Mendiluce, who is also CEO of Anticipa, said that the residential rental market “is here to stay” because it responds to structural changes and he said that we do not currently have a stock of residential homes for rent of the quality that meets demand.

Meanwhile, the Professor of Applied Economics at the Autonomous Universiry of Barcelona, Josep Oliver, explained the reason for that demand. According to data from INE, 42% of young people aged between 20 and 39 live with their parents, approximately five million people, of which 2.3 million have a job. “From this group, we can expect to see a demand for 500,000 rental homes in Spain over the next few years”, he said.

Similarly, the Director of Diversified Industries and Real Estate for EMEA at JP Morgan, Guillermo Baygual, analysed the market from the point of view of investors, who “are looking to obtain returns with minimal risk”.

Within the European framework, he made reference to UK legislation, which most protects the interests of owners and Dutch legislation, which is the most favourable towards tenants. In turn, the CEO of Sogeviso, Pau Pérez de Acha, made reference to social rental housing, given that in Europe the average proportion of rental housing allocated for that purpose amounts to 12%, whilst in Spain, that figure ranges between 0.8% and 2%.

Similarly, the CEO of Immeo, Thierry Beaudemoulin, analysed the German rental market, where just 45% of the population live in their own homes, one of the lowest rates in Europe. (…).

Finally, the Director for Strategy and Business Development at Acciona Real Estate, Luis Morena, also predicted a positive future for the residential rental market.

This will involve the elimination of tax incentives for house purchases; the maintenance cost of home ownership, which is similar to rental cost; and the recovery of the labour market, which is increasing geographical mobility and therefore demand for flexibility in terms of the residential real estate market.

Moreno pointed to insufficient financing to buy a home as another one of the key factors that will influence the increase in the percentage of residential rental homes in Spain in the short term. Currently, 15% of Spanish homes are occupied on a rental basis, whilst in 1970 that figure accounted for 30% of the available stock of homes.

Original story: El Mundo

Translation: Carmel Drake

Land Shortages Curb Investors’ Return To RE Development

2 March 2016 – Expansión

CBRE, the Urban Land Institute and Esade gathered together representatives from several real estate groups yesterday in Barcelona; they all agreed about the lack of assets for sale in the market. Benson Elliot, Colonial, Merlin Properties, Vía Célere and Unibail Rodamco have suffered in the last two years from the avalanche of investors that have set their sights on Spanish real estate and have exacerbated the lack of assets on the market. The CEO of Unibail Rodamco in Spain, Simon Orchard, said that “we are forced to develop, because the type of product that is in demand does not exist”. The Director of Merlin Properties, Luis Lázaro agreed with him, “no warehouses have been constructed in Madrid for ten years, but the demand is there, which is leading us to construct turn-key projects”.

The CEO of Colonial, Carmina Ganyet, added that “the lack of quality products does not only relate to the location of buildings, it also manifests itself in terms of their features”, and as such, the group allocates around 20% of its investment to new construction projects, which also offer much higher returns, of 10% and 15%. The Head of Benson Elliott in Spain, Gregg Gilbert, said that his fund is looking for “this kind of return on all of its projects”. And the founder of Vía Célere, Juan Antonio Gómez Pintado, added that the biggest problem is the lack of land and “the government is lagging behind in this regard”.

Original story: Expansión (by M. A.)

Translation: Carmel Drake