Meliá Finishes a €30M Renovation of its 900-Room Mega-Complex on the Costa del Sol

10 December 2018 – Diario Sur

Following the comprehensive renovation of the Don Pablo, Don Pedro and Don Marco Hotels, Meliá is preparing to change the brand to Sol Torremolinos Resort, with almost 900 rooms.

Just a few handcrafted details, commissioned in the 1970s, remind visitors of the origins and essence of the hotels Don Pablo, Don Pedro and Don Marco. They have undergone a comprehensive transformation following a €30 million investment to relaunch and consolidate them as the largest hotel complex in the Costa del Sol. The renovation work has taken three years and the only improvements left to make now, during the winter months, are in the spa located in the Don Marco Hotel, which is closed for the season, and in the indoor swimming pool, one of nine in the complex, explained Jaime Floyer, Director of Sol Don Hoteles. He added that Meliá is now preparing to change the brand to be renamed Sol Torremolinos Resort.

The three-hotel complex has modern façades, terraces that look like they end in the sea, a beach club and seven conference rooms, which have been renovated and equipped with the latest technology and with capacity for up to 500 people. It also has bedrooms and completely renovated common areas, plus 50,000 m2 of gardens and swimming pools, where the new work has improved the flow of clients from one hotel to another, to create the largest hotel complex on the Costa del Sol. “It is a resort that is looking to the future, we employ 210 people on average and we have a great diversity of nationalities amongst our loyal client base, with cases of tourists who spend up to five months here in the winter”, explained Jaime Floyer.

The new Sol Torremolinos Resort, on the beachfront, accounts for 5% of the hotel supply in Torremolinos, the town that is first in the ranking on the Costa del Sol by volume of hotel beds. This complex also has the advantage that it has an infrastructure that allows it to position each establishment in different and booming segments. In this way, Don Marco, the youngest of the hotels, inaugurated in 2004, as a four-star, 120-room property, is marketed as an establishment recommended for “adults only”.

By contrast, Sol Don Pedro is more focused on families (…); it opened to the public in 1971 and currently offers 344 rooms (…). Meanwhile, Don Pablo, with 442 rooms, is the big brother of the business (…) and opened its doors in 1974 (…).

In terms of the profile of clients, 25% are domestic, and the rest are from overseas, with Brits (24%) and Belgians (15%) standing out in particular (…).

Original story: Diario Sur (by Pilar Martínez)

Translation: Carmel Drake

Baraka Triggers the Immediate Suspension of the Building Work at Edificio España

23 November 2018 – El Economista

The magistrate of the Court of First Instance nº 67 of Madrid has ruled that the building work on Edificio España in Madrid be suspended immediately due to the risk alleged by Baraka before that legal body.

Baraka, the company owned by the businessman Trinitario Casanova, filed a lawsuit before the courts of Madrid in August requesting the suspension of the building work on the hotel in Edificio España, in Madrid, which is now owned by the hotel chain Riu. The hotel firm purchased the iconic building in Plaza España from Baraka last year.

Baraka is claiming in the courts that the commercial premises inside the building, spanning 15,000 m2, belong to it and that Riu is refusing to sign across the deeds.

The hotel group Riu indicates that it has not yet received any notification to suspend its building work, according to sources speaking to El Economista. The hotel chain clarifies that Baraka does not have any contract with purchase rights or to register on public record the commercial space in Edificio España. Indeed, they note that at the time of Riu’s purchase of the building, Baraka signed “a non-representative mandate contract to search for investors for the commercial area, which it has failed to do”, despite repeated requests from the hotel chain.

The firm points out that a sales agreement has been reached with Corpfin Capital Real Estate for the commercial area, which was signed in September and which is on the verge of being executed. Riu is threatening to sue Baraka for damages and losses if the building work at Edificio España is affected. The hotel chain is going to invest between €380 million and €400 million in the project, including the purchase of the building (around €272 million) and its renovation.

The future hotel will be a four-star property and will have 589 rooms, 15 meeting rooms and almost 3,000 m2 for social and corporate events. The inauguration of the hotel is planned for September 2019 and the property will operate under the brand Riu Plaza.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

ASG Invests €25M in the First Hard Rock Hotel in Madrid

10 October 2018 – Eje Prime

ASG Homes is converting one of its assets in Madrid. The real estate group is investing €25 million to transform one of its municipal office buildings into a four-star hotel. For this operation, the group has joined forces with the Hard Rock International brand, which has a presence in more than 74 countries and which is now debuting with its first hotel in the Spanish capital.

The hotel will have 159 rooms and will be located in the Madrilenian district of Atocha, opposite the Reina Sofia National Art Centre Museum. ASG is also planning to build an urban garden on the rooftop.

For Brian Betel, Managing Partner of  ASG Iberia Advisors, “this office building has a lot more potential as a hotel thanks to its proximity to the main tourist attractions in Madrid, as well as to the business centre and shopping district”.

ActivumSG in Spain (which operates under the brand ASG in the country) acquired the asset in 2015 for €15 million. The former owner of the building, which has a surface area of 7,800 m2, was the multinational AEW Europe.

The objective of the operation involves unblocking the asset for the group’s investors and taking a step forward in the company’s growth strategy in Spain. Similarly, sources at ASG Iberia indicate that they have opted for Hard Rock due to its “international reach”.

At present, the portfolio of ActivumSG in Spain comprises a dozen assets, with the exception of two, which were divested in recent months, located on c/Manuel de Falla and on c/Santa Leonor, both in Madrid. Even so, the operation that caused the fund to jump to the fore was its purchase of the Mercado de Fuencarral.

Original story: Eje Prime

Translation: Carmel Drake

Madrilenian Investor Group Buys Hotel Las Vegas In Málaga

17 November 2017 – Diario Sur

A Madrilenian investment group has acquired Hotel Las Vegas, in the centre of Málaga, which has been operating for more than half a century. The new owners, who want to remain anonymous, have signed an agreement with the Malagan chain Soho Boutique Hotels, founded by Antonio Gordillo and Gonzalo Armenteros de Dalmases, to operate this hotel facility for a period of 30 years. Although the amount paid for the purchase operation has not been disclosed, Gordilla did reveal the future plans for the establishment: Soho Boutique Hotels is going to invest around €2 million immediately in the complete renovation of the facilities, located right on the beachfront and with 107 rooms.

With the management of this hotel, the Malagan group is now the chain with the most hotel establishments in the capital, given that it already operates the Itaca Málaga, Soho Bahía Málaga, which will see its category rise to a four-star property at the beginning of next year, following a €500,000 investment, Soho Los Naranjos, Soho Boutique Málaga and now Soho Las Vegas, encompassing 270 rooms in the city in total.

Antonio Gordillo, partner and director general of the chain, wanted to send a message of calm to the workforce and assure the thirty employees that they are guaranteed the same conditions they have enjoyed until now. “We are a young chain, we started out in 2010, and one of our maxims is that our employees represent one of the company’s greatest assets. We place a lot of emphasis on ensuring our staff are happy and motivated”, he said.

In terms of the new activity for Soho Las Vegas, Gordillo said that all of the furniture, beds and televisions, amongst other items, will be replaced immediately, to adapt them to the needs of guests and the quality standards of the group. In the second phase, they are planning more comprehensive work such as the renovation of bathrooms and the launch of new services. “We are really surprised by how well the facilities have been maintained”, he said.

Soho Hoteles does not rule out incorporating more establishments in the city. The chain is in full swing with its expansion process, with new projects in Madrid and Cádiz. It already has establishments in Sevilla, Córdoba, Jerez, Granada, Fuengirola, Cáceres and Salamanca, taking its total portfolio to fifteen, including the properties in Málaga. “The company’s turnover amounts to €16 million, and in 2018 we expect to double that figure thanks to the new additions, including Soho Las Vegas”, he said, adding that the key to the chain’s success is that all of its establishments are located in the city centre. As such, they register an average annual occupancy rate of 82% and a revenue per available room (RevPar) of €82.

Original story: Diario Sur (by Pilar Martínez)

Translation: Carmel Drake

Axa Buys Remaining 45% Of Hotel Diagonal Mar For €70M

17 November 2017 – Eje Prime

Axa Real Estate is not one to rest on its laurels and so has acquired 100% of Hotel Diagonal Mar in Barcelona. The real estate arm of the French insurance company has committed to paying Iberdrola Inmobiliaria €70 million for the remaining 45% of the establishment to become the sole owner of the property, after it paid €80 million in June of this year for the other 55%.

With just over a month to go before the end of the year, this agreement represents the most important in the hotel sector in Barcelona, and one of the most significant in Spain. According to El Economista, this second payment will have been pre-determined by the two parties in the summer, when Axa’s first investment in the asset materialised.

Hotel Diagonal Mar is a property intended for holiday and convention (business) tourism, in the area of the same name, alongside the shopping centre of the same name, which Deutsche Bank purchased last year for €495 million. The four-star establishment is just 400m from the beach, has 413 rooms and 20 suites, as well as a large banquet room with capacity for one thousand guests and fifteen meeting rooms. The hotel was constructed by Iberdrola, after that firm reached an agreement with the chain Hilton, which has operated the establishment since then.

With this purchase, Axa is strengthening its interest in the hotel real estate business in Spain. In Madrid, it acquired Cine Rex on Gran Vía through the same real estate arm with which it has purchased the hotel in Barcelona. In that operation, the insurance company disbursed around €40 million to the firm Equity Inmuebles SL, controlled by the Mazin, Calero and Briones families.

Meanwhile, Iberdrola has completely disposed of one of its real estate jewels, but still operates a real estate portfolio with a gross leasable area of more than 200,000 m2 and an asset value of more than €600 million.

Original story: Eje Prime

Translation: Carmel Drake

The Race To Buy Hotels On The Costa del Sol Intensifies

29 August 2017 – Málaga Hoy

More than 20 hotels along the Costa del Sol and in Málaga have changed hands in just three years. The exceptional data in the tourist sector and the lack of interest in other assets have converted hotel investment into a highly disputed prize. At the beginning of August, Internos Global Investors, a real estate investment fund founded in 2008 by Jos Short and Andrew Thornton, two Brits with prior experience in the real estate sector in the USA, confirmed the purchase of Vincci Posada del Patio, a five-star property located in the centre of Málaga, for €26.7 million. This is just one example of a phenomenon that seems unstoppable right now.

In July, the Hotel Príncipe Sol de Torremolinos changed hands for the second time in two years. The Meliá group sold it in 2015 to the US investment fund Starwood Capital. That operation formed part of a global agreement comprising seven hotel complexes in Spain. Nevertheless, the US firm held onto the property for just 24 months and sold it in July to the British fund London Regional Properties.

At the beginning of the year, Hispania Activos Inmobiliarios (….) acquired its third hotel in the province: namely, the NH Málaga, a complex for which it disbursed €23 million with the commitment of undertaking an extension amounting to an additional €18 million. In 2015, it acquired Vincci Málaga (€20 million) and in 2014, it purchased the four-star Hotel Guadalmina from the Moroccan businessman Judas Azuelos in an operation estimated to be worth €21.5 million.

(…) One of the Hispania’s rivals in the hotel market is HI Partners, created by Banco Sabadell in 2015 (…). That entity currently owns more than 30 establishments, of which three are located in Málaga. In 2015, it purchased the Hotel Silken Puerta Málaga, which has been renamed Sercotel Málaga (…). In 2016, it acquired Incosol (…) and at the end of last year, it bought the four-star Hotel Málaga Palacio from the AC Group (…).

In addition, at the end of 2016, the French fund Foncière des Régions spent more than €500 million on 19 hotel establishments that Merlin Properties owned in Spain, including the Tryp Alameda in Málaga. That operation was signed almost at the same time as the arrival of Activum SG Capital (….), which acquired the Marqués de Sonora building located on Calle Granada from the Azucarera Larios company, which it plans to convert into a luxury hotel with 82 rooms.

Moreover, Mazabi, an investment fund that manages the wealth of eight Spanish families, acquired the former Hotel Senator de Estepona at the end of 2015 (…).

Plenty of other groups have also expressed their interest in joining the ever-expanding list of investors with properties along the Costa del Sol, including the Mallorcan entity Logitravel, the hotel group Palia and the Catalan firm Estival Group (…).

Original story: Málaga Hoy

Translation: Carmel Drake

Aina Purchases 50% Of Gran Hotel Velázquez From Didra Group

25 July 2017 – Expansión

Aina Hospitality – the fund promoted by Edmond de Rothschild and Jaume Tàpies – has purchased 50% of the iconic Gran Hotel Velázquez from the Didra Group. The property is located at number 62 of the Madrilenian street whose name it bears.

This asset, located in the neighbourhood of Salamanca, just a stone’s throw from the Retiro park and in the heart of Madrid’s golden mile, has been owned by the Didra Group for just a few months. It is currently undergoing a comprehensive renovation with the aim of ascending its category.

Together with the Didra Group, owned by the Ardid Villoslada family, Aina Hospitality will reposition the property, transforming it into a five-star hotel. Last year, the family office owned by the Ardid family reached an agreement with the Salazar family – the former owners of SOS Cuétara – to purchase this hotel for €63 million and now, almost a year later, it has decided to open up the share capital to Aina Hospitality.

At the moment, the four-star Gran Hotel Velázquez, has 143 rooms but it recently closed its doors to undergo a complete refurbishment.

Repositioning

Following its renovation, the hotel will have 111 rooms and suites, a restaurant, a rooftop terrace, cinema, bowling alley, luxury spa and fitness centre.

Tàpies, the CEO of Aina Hospitality, highlighted the excellent location of the hotel: “Madrid is a cultural, historical and leisure destination and it is a tourist and financial centre. This hotel is located in the centre of the city, close to some of the most important tourist attractions and the historical centre”.

The operation represents Aina Hospitality’s seventh investment in Europe and is in line with the investment strategy carried out by the manager to date. Aina Hospitality purchases high-end properties – with four- and five-stars ratings. In addition to Madrid, the fund has recently made acquisitions in Paris, Eindhoven, Vienna, Brussels and Berlin.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Hotel Investors Switch Their Focus To Spain’s Second Cities

20 July 2017 – Expansión

Hotels have become of the star assets of the real estate sector with Socimis and investment funds lining up to buy them. And the forecasts show that these actors are set to consolidate their presence in Spain, gaining ground on the hotel groups – which will continue their commitment to a strategy focused increasingly more on management and less on ownership – and will analyse new secondary locations, in light of price rises and the decreasing yields in prime cities.

According to the Hotel Asset Management 2017 report, prepared by Magma HC, three-star hotels captured the attention of investors last year, given that they represent the most attractive asset for implementing repositioning models and improving prices. Specifically, 38% of the transactions closed in 2016 involved three-star hotels, 28% related to four-star properties, 24% to low-cost establishments and the remaining 9% to five-star hotels.

Albert Grau, Managing Partner at Magma HC, explained yesterday that the transaction market will shift its focus to the holiday segment, over the next few months, due to the (high) value of assets in prime urban destinations, such as Barcelona, Madrid, Málaga, San Sebastián and Palma de Mallorca, which are at levels that compromise their future profitability.

Although in previous years, the urban hotel market was the most sought-after by investors, in 2016, it accounted for just 33% of operations, whereas the holiday segment increased to account for 66% of the total. “Prices in cities such as Madrid and Barcelona have peaked, and purchases to generate wealth or profitability are complicated given the numbers”, said Grau.

By contrast, he considers that Spain’s secondary cities offer “great opportunities” for investors thanks to the significant potential that they hold and the fact that there are well-located assets there at “very attractive” prices.

However, the partner at Magma HC considers that the sector is a long way from a bubble, thanks to the greater professionalisation and the new requirements in terms of indebtedness levels.

Moreover, the report highlights that the Spanish hotel sector can expect to see new operations between hotel groups, such as between Starwood and Marriott, Fairmont and Grupo Accord and the purchase of Sidorme by B&B Hotels.

Commitment to rent

In terms of the business model, the most popular formula is still rental. Grau underlines that, given the strong performance of the market, owners who took the decision to bet on variable rentals are now receiving greater returns. In addition, the partner at Magma HC believes that the period of rent renegotiations, seen in previous years, is now over.

According to Magma HC’s report, hotel groups own 37% of their assets, lease 33% of them, manage 18% and operate 13% as franchises.

Grau explains that “more Anglo-Saxon” operations – management and franchising – are not growing, but continue to have a specific weight in the market and there is a growing trend to adopt them increasingly more, in line with international standards.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

EDTL Sells Hotel Innside Madrid Génova To Armando Álvarez Group

5 May 2017 – Real Estate Press

The Armando Álvarez group has acquired the iconic Hotel Innside Madrid Génova to form part of its Sardinero Hoteles hotel chain. JLL Hotels & Hospitality Group has advised the seller on the transaction.

This four-star hotel has 65 rooms, four of which are suites, as well as a breakfast area, a cocktail lounge, 2 meeting rooms, a gym and two magnificent terraces, all spread over a total surface area of 3,700 m2.

In its new phase, the Hotel Innside Madrid Génova will be operated by the buyer group itself, which has prior experience in hotel management. This is a strategic asset for the Armando Álvarez group, which sees the arrival of the Sardinero Hoteles brand to the Spanish capital, as well as due to the intrinsic real estate value of the building.

Inaugurated in 2013, following a refurbishment that involved the change of use of the property from residential to hotel, it offers a perfect balance between historical features and modern facilities. Moreover, it has an excellent location, next to one of the most exclusive areas of Madrid, in Plaza de Alonso Martínez, close to the main shopping areas (Calles Serrano/Fuencarral), businesses district (Plaza de Colón/Paseo de la Castellana) and cultural and leisure  offerings (Chueca/Malasaña/Alonso Martínez).

The price paid per room, which exceeds €400,000, sets a new precedent for four-star hotels in Madrid.

According to Luis Arsuaga, Director at JLL Hotels & Hospitality Group, “this operation is an example of the strong investment appeal that Madrid in terms of hotels. In 2016, investment volume in the hotel segment amounted to €2,155 million across the country, the second-best level in the last decade, of which almost 28% corresponded to properties in the Spanish capital. All indications are that the trend will continue this year and that the interest in Spain and in Madrid, in particular, still has a long way to go, and will continue increasing”.

Original story: Real Estate Press

Translation: Carmel Drake

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