Barcelona City Hall Suspends Tourist Licences For 1 Year

3 July 2015 – Cinco Días

The mayoress of Barcelona, Ada Colau, has fulfilled one of the promises she made during the election campaign for the municipal elections with the launch of a one-year moratorium for the granting of tourist licences in the city. “Tourism is one of the city’s main assets and we have to take care of it and make it sustainable”, she said.

Colau’s announcement had been expected by the market, since it had been one of her main promises during the election campaign, but it did not take shape until yesterday. Barcelona’s City Council, governed by Barcelona en Comú, has taken the decision to freeze licences for at least one year. The town council’s aim is to submit a Special Plan for the Regulation of Tourist Accommodation during the first quarter of next year, although it does not rule out extending that period by another year.

Some of the most iconic hotel projects being carried out in Barcelona include the conversions of Torre Agbar, the Deutsche Bank tower and the Henkel building. But, according to Janet Sanz, deputy mayoress of ecology, urban development and mobility, the actual list is longer and includes around thirty properties. “We are not saying that none of these projects will go ahead, simply that we are beginning a process of reflection on our tourism model”.

This moratorium, which comes in addition to the one that already exists in the neighbourhood of Ciutat Vella, is intended to allow time for an in-depth analysis of the stock of tourist accommodation in the city, so that the existing supply and the economic and social impact of tourism can be evaluated and diagnosed. The freeze will affect all establishments, from luxury hotels to hostels, so that a “calm debate” can be held about the situation in the city. Plans are afoot at the Deutsche Bank tower, which KKH purchased  last year, to build a five star Four Seasons hotel, costing €150 million, and the plan is to open a Grand Hyatt hotel in the Torre Agbar, which Emin Capital acquired in 2013. Others, such as the property being renovated by the construction company owned by Josep Lluís Núñez, the former President of FC Barcelona, will be excused from the moratorium.

In terms of Spanish hotel chains, the moratorium may affect Barceló, which is planning to open two new establishments in the city: one on Avenida Diagonal, 414 with views of the Casa de les Punxes, and the other, the conversion of the former headquarters of Nubiola Pigmentos, on the corner of Pau Claris and Gran Vía, which is still in its early phases. Nearby, one of Melia’s ME hotels, with 173 rooms, on the corner of Calle Casp and Paseo de Gracia may be affected. (…). Iberostar, Room Mate and Praktik Hotels could also be affected. (…).

The market regards the moratorium as a sign of insecurity for the entry of new investors. “The decision creates legal and administrative insecurity and leaves investors interested in entering the city on stand by”, says Inmaculada Ranero, CEO of Christie + Co for Spain and Portugal. (…).

Original story: Cinco Días

Translation: Carmel Drake

Rothschild Launches Fund To Invest €400M In EU Hotel Sector

13 April 2015 – Expansión

The wealth management specialist creates a real estate (investment) vehicle.

Edmund de Rothschild, the group that specialises in the management of large fortunes, is breaking into the hotel sector. Aina is the name of the real estate fund that Rothschild has launched with the aim of purchasing four- and five-star hotels, (of between 90 and 150 rooms and between 150 and 450 rooms) in Europe.

Managed by Jaume Tapies, the former Chairman of the international network Relais & Chateaux, Aina is seeking to raise more than €400 million, and more than half of that amount will relate to debt. The roadmap predicts the signing of around 20 transactions with an average value of around €20 million to €25 million.

Aina has identified 29 cities of interest, due to their potential for tourism and business, where there is no excess supply or barriers to entry. The list includes two Spanish cities, Madrid and Barcelona, and two others may join them, namely Sevilla and Bilbao. “Spain is a priority country and now is a good time to invest there, as well as in Italy and Portugal, and in the major capital cities such as London, Paris and Amsterdam”, says Tapies.

Aina, whose investment plan will take two years to complete, has a process open with institutional investors to secure €200 million in funding, which is about to close. Edmund de Rothschild will be responsible for the administration and custody of the funds. The minimum investment required to participate is €1 million. The fund will have a life of seven years and the investment period will be three years. The gearing ratio will range between 40% and 50% of the total portfolio value, and on an exceptional basis, may reach up to 60% for a single asset.

Profitability

The strategy also centres on risk diversification. One single hotel may account for 25% of the investment, at most, and no single country may account for more than 40%. On the other side of the scale, profitability will also be high, at 15% p.a., based on the profitability of the rental income and the potential for the increase in the value of the assets.

The fund will focus on finding properties with discounts of between 25% and 40% of their market value. Subsequently, it will increase their values by between 25% and 30% by redesigning their operating models and will obtain a similar percentage from the sale of these properties to investors that have lower long-term profitability requirements.

So far, investors from Spain, South America, Australia and Asia have all expressed their interest in participating in Aina.

In addition to the management team led by Tapies, Aina has an advisory board, which includes, amongst others, Charles Petrucelli, former Chairman of the travel division of American Express; Antoine Corinthios, former Chairman of Four Seasons in EMEA; and Jean-Jacques Gauer, for Chairman of Leading Hotels of the World.

Gabriel García is also advising the fund; he owns the Hotel Orfila in Madrid and is the Chairman of Relais & Chateaux in Spain.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Meridia To Build A Hotel In Henkel’s Former Headquarters

26 January 2015 – Expansión

Barcelona / The fund will demolish Henkel’s old offices near the Sagrada Familia.

The real estate fund Meridia is joining the latest trend in the real estate sector in Barcelona: the demolition of old offices to build large hotels and attract international hotel brands. The fund led by Javier Faus, the Vice-President and Head of Finance and Strategy of FC Barcelona, will knock down the former headquarters of Henkel Ibérica to convert it into a complex containing a four star hotel, a block of flats and several townhouses.

The name of the chain that will run the hotel has not been revealed, but sources close to the transaction said that Meridia is finalising an agreement with a company that does not yet have a presence in Spain. The total investment, including purchase of the land, will amount to around €40 million.

The hotel project envisages the construction of 182 rooms and a 100-space car park. The complex, located near the Sagrada Familia, will also include a block of 33 flats and space for six terraced houses.

Other similar projects are already underway in Barcelona: the Deutsche Bank building, which currently serves as the headquarters of the law firm Cuatrecasas, will be demolished and replaced by a hotel that may be managed by Four Seasons. The Torre Agbar will be converted into a hotel to be run by Hyatt, although in this case, the external structure of the building will remain intact. Another building to be demolished is the old Hotel Barcelona, which will be replaced by a new hotel to be managed by Melia.

Original story: Expansión (by M. Anglés and J. Orihuel)

Translation: Carmel Drake

Hotel Villa Magna In Madrid Up For Sale

16 January 2015 – idealista news

The Spanish hotel sector is on the radar of investors. The combined effects of the growth in tourism, falling price of oil and weakness of the euro bodes well for the performance of the sector; and sellers do not want to miss out on the opportunity. In the luxury segment, not only are the Ritz and Miguel Angel Hotels in Madrid up for sale, so too is the Villa Magna. Its owner, the Portuguese businessman Pedro Queiroz Pereira has expressed interest in selling the property, although the bids received so far have fallen below expectations.

Although no official sales mandate has been issued yet, the Portuguese firm Queiroz Pereira is open to offers for the purchase of Villa Magna, located in the Salamanca neighbourhood of Madrid. According to market sources, the selling price is close to €130 million, a price that no investor has been willing to pay so far.

Financial sources say that the price is inflated and that the hotel is not worth more than €90 million. Idealista.news contacted the owner of the property who declined to comment.

The Portuguese holding company, which also owns the Ritz Hotel in Lisbon, purchased the Villa Magna in 2001 from a Japanese family, the Shirayamas. Six years later, in 2007, it decided to undertake a “facelift” of the hotel, which was closed for 14 months whilst renovation work was completed. Sodim, a subsidiary of the Queiroz Pereira Group (and owner of Semapa, the main industrial group in Portugal) invested around €150 million on the hotel acquisition and remodelling work.

(……)

Hotel Villa Magna currently has 150 rooms of between 30m2 and 290m2, as well as various conference rooms, meeting rooms and a garden for outdoor receptions and dinners. It also has a wellness club with a sauna and Turkish bath.

Hotels, an investor target

In 2014, investment in hotels amounted to €1,081 million, up 37% on the previous year, to reach levels similar to those recorded before the crisis. The following transactions were amongst those that took place in the 5 star segment: the Hotel Renaissance in Barcelona was sold by Marriott International to the Qatar Armed Forces for €78 million; the Hotel Intercontinental in Madrid was sold to the Katara Hospitality Fund for around €60 million; and the Hotel Meliá La Quinta in Marbella was also sold.

Last year was also significant because more transactions were recorded in the holiday hotel sector than in the urban sector. Transactions included the acquisition of the Guadalmina Hotel in Marbella (4 star) and the Meliá Jardines hotel in Teide, Tenerife (also 4 star) by Socimi Hispania.

The arrival of the Four Seasons chain, a boost for the sector

The arrival in Spain of the luxury hotel chain Four Seasons has increased the level of interest in the renovation of historic properties, such as the Miguel Angel and Ritz Hotels in Madrid, which are currently up for sale. This foreign chain expects to open its first property in the Plaza de Canalejas, Madrid in 2017. It will be the first Four Seasons hotel in Spain.

Original story: idealista.com (by @pmartinez-almeida and tânia ferreira)

Translation: Carmel Drake

Wanda, Four Seasons to Bring Super Luxury to Madrid

13/01/2014 – El Economista

Two new hotels, one belonging to Chinese billionaire Wang Jianlin and his Wanda group which is set to open its doors inside the iconic Edificio España building (pictured on the right), and the other, to be occupied by Four Seasons, to open in the so-called Canalejas triangle, will foreseebly offer the first apartments having access to top-end hotel amenities.

Potential buyers of the flats must obviously have a great purchasing power. Normally, they would be businessmen seeking second residences providing them with privacy and, at the same time, exclusive hotel services.

In addition, an owner of such an apartment could ask for preparing the dwelling for their arrival at the city or doing some necessary fittings and fixtures.

The Mixed Use

This kind of property model has been already pursued in the past but finally it didn’t pan out. In 2007, Portugese family Queiroz Pereira, the owners of the Ritz in Lisboa or the Hotel Villamagna in Madrid, reduced the number of keys to 110 and turned the rest of the rooms into luxury apartments, aiming at intending 100% of the available space for them. Though, in the end, they only renovated the property and stood by the traditional use of the property.

“Right now, none of the establishments combines a luxury hotel with high-end dwelling units, like in other cities. In Madrid, we only find commercial properties of mixed use, such as one of the Cuatro Torres standing out in the skyline of the northern part of the capital. Owned by Sacyr, the skyscraper houses a five-star Hotel Eurostar Madrid Tower, while the rest of the building is leased to consulting firm PwC ”, explained Patricio Palomar, Alternative Investment head at CBRE.

 

Original story: El Economista (by Virginia Martinez & Alba Brualla)

Translation: AURA REE

Emin to Invest €150 Mn in Opening a Four Seasons Hotel Inside Deutsche Bank´s Tower in Barcelona

5/05/2014 – Expansion

Yesterday, Emin Capital sealed a pre-agreement on purchase of a building from Deutsche Bank in Barcelona for €90 million. The fund is planning to invest another €60 million to open a five-star, 150-room hotel of the Four Seasons chain in there.

The building is located on the junction of the Paseo de Gràcia and the Avenida Diagonal Streets in Barcelona. It formerly belonged to three Andorran families: Reig, Cerqueda and Ribes who bought it in 2002 for €80 million. In total, its area covers 15.000 square meters above the ground level foreseen to be transformed into 150 hotel rooms. The five-storey property´s roof structure will serve as a terrace reserved for the hotel guests.

One of the stumbling blocks of the transaction was that the present tenant of the property, the law office Cuatrecasas, has got a lease contract until 2017. However, the odds are high that the lawyers will move to their new headqarters in the @22 district earlier in May 2016.

The fund run by Jordi Badia relies on financing from Banco Sabadell and La Caixa that also helped it to acquire the Torre Agbar in Barcelona last year. 

For the moment, there is no Four Seasons hotel in Spain, however, there is one included in the Canalejas project to be implemented in Madrid. Its inauguration will probably take place earlier than Emin Capital could start works in the newly acquired building in Barcelona.

The fund raised €400 million to invest in Madrid, Barcelona and other European cities. 

 

 

Original article: Expansión (by Marisa Anglés)

Translation: AURA REE