Tag: Fitur

Hotel Financing: Sabadell’s Market Share Rises To 31%

26 January 2017 – Expansión

Sabadell was the only Spanish bank to have its own stand at Fitur. The entity’s decision to physically attend the tourism sector’s major annual meeting reflects its desire to consolidate its position as the key player in this business segment, which is so strategic for the Spanish economy.

Two years ago, the bank chaired by Josep Oliu decided to launch Sabadell Negocio Turístico, a specialist division that has allowed it to secure a market share of 31% and increase the volume of financing it has granted to the sector to €4,500 million.

Over the last two years, the granting of loans to tourism companies has grown by €1,500 million, according to José María Martín Rigueiro, Director General of this business unit.

According to the executive, 90% of this volume is used to finance hotel purchases and the remaining 10% corresponds to loans used for renovation projects and energy efficiency improvement plans in tourist establishments. Nevertheless, in terms of the number of transactions, the proportion is inverse, in other words, 90% of the loans (by number) are granted for renovations and 10% for acquisitions.

More than 13,500 clients

“We have positioned ourselves as a key player in the whole sector, given that we are the only bank to offer a specific value proposition for financing tourist services and products. Moreover, it is suitable for large hotel chains, as well as the smallest of rural hotels”, said Martín Rigueiro.

Thanks to its specialist agents, Banco Sabadell is growing its client portfolio by 7% per annum and is now collaborating with 13,500 companies, including hotel groups, campsites, travel agents and tour operators. Moreover, its net investment balance is increasing at an annual rate of more than 10% and the volume of client resources managed is growing by more than 25% each year. The objective for this year is to grow its client portfolio by 8% and to increase its credit investment by 10%.

“At Fitur, we were breathing an environment of maximum optimism; the hotel sector is expected to grow this year, in terms of both occupancy rates, as well as average room rates”, explained the Director of Sabadell Negocio Turístico.

The banker also attested to the strong interest from international funds keen to invest in hotel assets in Spain. Investors are managing returns of between 9% and 18%, said Martín Rigueiro. (…). The greatest interest is being seen in the vacation hotel segment, as well as in the urban segment, in major capital cities.

Financing for hotel purchases is being provided across the board: to investment funds, Spanish family offices, individual investors, as well as hotel chains. 90% of the sectors largest players are clients of Banco Sabadell, and the bank now also has a market share of 45% in the SME tourism segment.

According to Sabadell, the default rate of new loans granted to hotels since the crisis is very low, given that operations are no longer being leveraged on the basis of the value of the underlying real estate assets, but rather on the basis of the business plans and income statements of the establishments. (…).

In parallel to this specialist business unit, Sabadell also operates in the hotel sector through HI Partners, a hotel investment and management company.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Meridia Capital Considers Creating A Hotel Socimi

21 January 2016 – Expansión

The fourth investment fund that Meridia Capital is going to launch will specialise in the acquisition of urban hotels and may be a Listed Real Estate Investment Company (Socimi).

The founder and CEO of the fund manager headquartered in Barcelona, Javier Faus, said at a forum organised by Exceltur in advance of Fitur that “there is capacity in Spain to have three or four Socimis specialising in the hotel sector”. “And not only in the holiday segment”, said Faus, referring to the only pure hotel Socimi in operation in Spain at the moment, namely, Bay, which was created last year as the result of an alliance between Barceló and Hispania. Faus acknowledged that Meridia is currently analysing whether its fourth fund “could be a hotel Socimi”.

“The final decision still needs to be taken, and although that will not happen for a few months, it will be taken in 2016”, he said. The CEO of Meridia also said that the new vehicle will specialise in urban hotels, although the firm still needs to decide whether it will lease or manage these properties and whether or not it will build up a multi-brand portfolio, containing hotels from various chains. Faus added that he has not yet started talks with any hotel group.

Nevertheless, he is very clear about the location of the assets: Madrid and Barcelona, “although the fund may allocate between 15% and 20% of its resources to investment in other countries”, he added.

Investors

The strong interest in Spain from the international markets is helping the Spanish Socimis, which are consequently not facing much difficulty when it comes to raising capital. The urban hotel segment continues to be one of the most attractive, given the strong performance of the tourist sector in Barcelona and the significant recovery that the business sector is experiencing in Madrid.

In fact, experts in the real estate sector say that the biggest problem at the moment is finding assets available for sale, although in the hotel sector the willingness of the large hotel chains to sell buildings and continue leasing and managing them (sale & leaseback) may represent an opportunity for the Socimis, which for the most part, are looking for assets that they can lease.

This would be Meridia’s fourth fund and it may be created almost in parallel to the third, which is currently being established and which is focusing on investment in real estate assets in general. Faus expects that the third fund will raise capital amounting to €250 million, mainly from institutional funds in the US and Europe, but also from insurance companies. Together with bank financing, he expects that it will invest around €600 million.

The previous fund, Meridia II, invested €400 million between 2014 and 2015, of which €150 million came from investors and the rest from bank financing. The first fund launched by Faus, in 2007, was devoted entirely to the hotel sector, and as such the Socimi that he is considering creating now would not be new territory for him. That first fund acquired hotels outside of Spain, operated by a variety of hotel brands. They included the Hotel Ritz-Carlton and the Crowne Plaza in Santiago de Chile, the Four Seasons in México DF, the InterContinental in Sao Paulo and the Hotel W París Ópera, as well as a stake in three resorts in Thailand operated by Six Senses (…).

Original story: Expansión (by Y. Blanco and M. Anglés)

Translation: Carmel Drake