Quabit Joins Forces With US Fund Avenue Capital

15 December 2016 – Valencia Plaza

Quabit Inmobiliaria and the US investment firm Avenue Capital have signed a binding framework agreement for a financing line amounting to €60 million from funds advised by Avenue Europe International Management, L.P.

The available funds under this credit line will be used to acquire buildable urban plots of land in the Community of Madrid and the surrounding area, as well as in other regions with high potential for demand.

After successfully completing a capital increase last year, the company chaired by Félix Abánades, has been holding intensive negotiations with different investment funds for the last few months. It has now closed this agreement with Avenue Capital, given the professionalism of the investment firm and its certainty for the great potential for growth and profitability in the Spanish real estate sector.

With the signing of this agreement, Quabit Inmobiliaria is continuing to fulfil the objectives set out in its strategic plan to 2020. Specifically, it means that it is fulfilling another one of the most significant milestones in its business plan regarding the raising of financing to undertake new investments and develop new residential projects.

“The strategic agreement with Avenue is a perfect symbiosis for generating value. On the one hand, Quabit has more than 20 years of experience, an expert team in the management of land and real estate developments, sensitivity and market knowledge, an established financial structure and a healthy equity position. All of this, combined with Avenue’s investment capacity, gives us the capability to start growing again and to become one of the key players in the consolidation of the real estate business in Spain once more”.

The most important terms of the agreement are:

– The funds from this credit line will be used to finance 70% of all land acquisitions. The remaining 30% will be financed by Quabit.

– The funds must be drawn down during the first year of the contract, and repaid when the credit line matures (after 4 years).

– Quabit may make early repayments from month 18 onwards and it may reuse the funds to make new investments in land.

– A new company will be constituted for each one of the plots of land that are financed. Each company will be owned 100% indirectly by Quabit.

– Moreover, Quabit will provide Avenue with warrants over its shares, which will allow the investment firm to own up to 6% of the real estate company’s share capital if it subscribes to new share issues in several tranches. During the first two years of the agreement, the average subscription price will be €3.25/share; and during the last two years, it will be €3.75/share. The use of the different warrant tranches will depend on how much of the credit line is drawn down.

Quabit and Avenue have set a deadline of 28 December for signing all of the documents that form part of this agreement, which will also be the start date for the line of credit’s term.

Original story: Valencia Plaza

Translation: Carmel Drake

Hispania Buys Hotel Oasis Resort In Lanzarote For €28M

22 July 2016 – Expansión

The Socimi Hispania, through its subsidiary Bay Hotels & Leisure, has acquired 100% of the company Inversiones Inmobiliarias Oasis Resort, owner of the Hotel Oasis Resort located in Costa Teguise (Lanzarote), from CaixaBank and Metrópolis for €28 million.

After this operation, the Barceló Group will operate the hotel under a lease contract, which forms part of the framework agreement that governs all of the hotels operated by the group.

The 4-star property has 372 rooms and is located right on the beachfront, opposite Hotel Barceló Lanzarote.

As part of its investment strategy, the group is considering integrating this asset with Hotel Barceló Lanzarote, with the aim of creating a mega resort with almost 800 rooms on the beachfront.

Although the hotel was refurbished recently, an investment of €4 million is planned to bring it up to Barceló’s standards.

Following this acquisition, Hispania now owns 35 hotels, primarily in the vacation segment, and so has more than 10,400 rooms, making it the largest (non-operator) hotel owner in Spain.

According to Hispania’s CEO, Concha Osácar, the Canary Islands is a key market for the company, given its stable occupancy rates throughout the year and its high degree of exposure to European tourists.

On 18 July, Hispania acquired 100% of the shares in the company Later Deruser, owner of the Hotel Paradise Portinatx in Ibiza (Balearic Islands) for €11 million, which will also be operated by Barceló.

Original story: Expansión

Translation: Carmel Drake

Barceló Sells Hotel In Tenerife To Chinese Group ‘Kangde’

23 April 2015 – Expansión

Another transaction in the Spanish hotel sector has a foreign buyer. Barceló has sold the Hotel Barceló Santiago (in Tenerife) to the Chinese group Chongqing Kangde Industrial. Negotiations began in 2013, when Barceló and Kangde signed a framework agreement to explore options together.

After more than a year of meetings, the Spanish tourism group agreed the sale of the property to Kangde. According to the Chinese group’s website, the alliance was signed during Lu Chaokang’s tour of Europe in search of investment opportunities. Chaokang, the Chairman of Kangde, visited a dozen projects in Budapest, Madrid, Barcelona and the Canary Islands.

Consideration of €50 million

The sale, which amounted to around €50 million, has not been formalised yet, as the buyer is still waiting to receive approval (of the purchase) from the Chinese government. The deadline for obtaining the backing ends in May. Nevertheless, according to industry sources, Barceló has already received confirmation that the transaction will close on time.

The Spanish chain will continue to manage the four-star hotel, which has 406 rooms and is located close to the Playa de los Gigantes. However, Kangde may be interested in renovating the property and increasing its (star) rating. In 2006, Barceló invested €7 million in the refurbishment of Hotel Santiago, which entered its portfolio in 1995. The sale of the hotel forms part of the process designed by Barceló to reduce its exposure to real estate, which has reached a historic high – (it owns) almost 63% of all of its rooms. The major milestone on this roadmap has been the creation of the Socimi, Bay, together with Hispania. Barceló will transfer 16 hotels and two shopping centres worth €421 million to the Socimi and whereby reduce the percentage of rooms it owns to 43%.

In 2014, Barceló recorded a profit of €46.4 million, up 85.6% on the previous year and a turnover of €2,056.6 million.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake