Azora Acquires HQ of the Former Cortefiel Group for €28.3M

24 January 2019 – Eje Prime

Another operation has been closed in the office market in Madrid. The Socimi GMP, controlled by the Montoro family and the sovereign fund of Singapore, has sold the building located at number 51 Calle Llano Castellano to Azora. The price of the operation amounted to €28.3 million.

The property now controlled by Azora, the real estate manager founded by Concha Osácar and Fernando Gumuzio, is occupied in its entirety by Tendam, previously known as the Cortefiel Group and owner of the fashion chains Cortefiel, Women’secret, Springfield and Pedro del Hierro.

The rental contract for the building, which has a gross leasable area of 23,108 m2 and 145 parking spaces, is due to expire in 2023.

The building was constructed in 1990 and had been controlled 100% by GMP since 2015. Until then, the property was in the hands of the real estate division of General Electric through the company Renta Gestión Fuencarral.

Its new owner, Azora, specialises in the investment and management of real estate assets for third parties and has a portfolio comprising more than €4.5 billion in assets. The company was the promoter of Hispania, the first Socimi to be constituted, which made its debut on the stock market in Spain in 2014.

Azora was considering its own stock market debut, but in the end, it suspended that process last year. Azora and Hispania ended their agreement last year, after Blackstone’s successful takeover of the Socimi.

Since then, the company has focused on the residential rental market through the creation of a joint venture with CBRE Global Investment and Madison to reach a portfolio of 10,000 homes over the coming years.

Azora manages the real estate portfolios of funds and wealthy investors, such as George Soros, CBRE Global Investors, Goldman Sachs, Axa Investment Management and Bank of Montreal, amongst others (…).

Original story: Eje Prime (by P. Riaño and I. P. Gestal)

Translation: Carmel Drake

CBRE: Hotel Investment Set a New Record of €4.9bn in 2018

10 January 2019 – Expansión

The hotel segment broke a new record last year thanks to two key operations: the takeover of Hispania by the US fund Blackstone and the takeover of the chain NH by the Thai firm Minor.

The hotel segment made history again in 2018 with a record investment volume of €4.9 billion, which represented an increase of 33% with respect to the previous year, boosted by the US fund Blackstone’s takeover of the Socimi Hispania and the Thai firm Minor’s takeover of the Spanish chain NH.

According to data from the consultancy CBRE, last year, 240 hotel assets were transacted in Spain spanning 36,500 rooms in total, which represents growth of 17% and 30%, respectively. In other words, more and larger-volume operations were closed in 2018 than in 2017.

The hotel market whereby completed five extraordinary years, driven by the excellent evolution of tourism. Spain is a market leader in this activity, with 81.9 million international visitors in 2017 and 81.2 million last year (…).

The most active investors in 2018 were institutional players, which accounted for 66% of operations, followed by hotel groups (21%) and private equity and family offices (13%). In the ranking of operations, the purchase of Hispania stands out, which ended up in the hands of Blackstone after the fund acquired more than 90% of that company. The US giant purchased the Hungarian-born magnate George Soros’ 16.56% stake in Hispania in April and, subsequently, launched a takeover valuing the company at €1.992 billion. After successfully completing the takeover in September, Blackstone became the largest hotel owner in Spain, with a portfolio of 46 assets and more than 13,144 rooms.

After the purchase of Hispania, came the takeover of NH by Minor. Following that operation, the Thai group became the owner of a portfolio of 350 hotels in Europe and Latin America – 30% of which are in Spain.

Other significant operations also included the entry into the market of the Chinese group Gaw Capital, which acquired 50% of the Hospes Hotel Group, worth €125 million, teaming up with Omega Capital, the family office owned by Alicia Koplowitz, owner of the other 50% of the chain.

In terms of individual assets, the purchase of the luxury Villa Magna Hotel in Madrid stands out. The Turkish group Dogus sold it to the Mexican Socimi RLH, chaired by Allen Sanginés-Krause for €210 million.

Renovation

The National Director of CBRE Hotels España, Jorge Ruiz, explained that, as well as the vertiginous sale of hotel assets, the notable investments in asset renovations stood out once again.

“The Spanish hotel stock is better equipped today to face the challenges on the horizon, such as the recovery of competing destinations, the impact of a hard Brexit and a slowdown in the Spanish economy”, he said.

Ruiz explained that, unlike during the previous upward cycle, hoteliers have opted to invest in renovating their portfolios, which will allow them to increase their prices.

In terms of the type of assets, vacation hotels accounted for 64% of investments, following the trend established in 2017, due in large part to the purchase of Hispania, whose hotels are located primarily on the Spanish islands and along the coastline. Investment in urban assets went from 40% to 36%. In 2018, the main star asset were 4-star hotels, which accounted for 64% of operations, followed by 5-star hotels, with 21%.

Star destinations

By destination, the Canary Islands accounted for 35% of investment, followed by the Balearic Islands, with 20%. The third-ranked location was Madrid, with 12%, followed by Barcelona (8%) and Málaga (5%) (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Arum Group Invests Another €80M to Expand La Manga Club

20 November 2018 – Eje Prime

Arum Group is getting its wallet out to expand its resort in Murcia. The Spanish property developer, chaired by the magnate Jordi Robinat, is planning to invest more than €80 million in the upcoming expansion of La Manga Club, its residential complex located in the municipality of Cartagena, according to explanations provided by sources at the group speaking to Eje Prime.

The company is already processing a new partial plan to expand the resort by more than 48,000 m2, with the aim of developing new homes. Moreover, if the operation goes ahead, the group forecasts that the building work will begin between the end of next year and the beginning of 2020. The scheduled execution period is between three and four years.

Currently, La Manga Club has a surface area of 1.3 million m2, contains 2,300 homes, two 5- and 4-star hotels, three golf courses (one of which has 18 holes), thirty clay tennis courts, eight soccer fields and a cricket pitch.

With the majority of the residential assets now sold, Arum Group is developing the last one hundred homes, which will be primarily dedicated to international buyers. “English investors are the most common, although increasingly, we are closing more operations with Norwegian clients, as well as Belgians and people from other countries in the north of Europe”, explain sources at the company.

La Manga Club is the only project that the Arum Group has underway in the Region of Murcia. In fact, the property developer owned by Robinat purchased the complex from the Anglo-American cruise company, The Peninsular&Oriental Steam Navigation (P&O), in 2004 for €146 million.

Since then, the Spanish company, headquartered in Barcelona, has undertaken several expansions of the resort, which is one of the largest in southern Europe. The company owns three other residential projects currently underway in Spain, two in Cataluña and one in Tenerife.

The transformation of the Arum Group

The origins of the Arum Group date back to the 1990s, when Jordi Robinat, one of the people responsible for the launch and subsequent sale of the iconic Palace and Ritz hotels in Madrid, decided to set up on his own. He did so initially by creating the firm Med Resort before then formalising the expansion of the company in the Spanish real estate sector, under the brand Medgroup.

With that company, which at the time included George Soros and the former Goldman Sachs banker, Richard Perry, amongst its largest shareholders, Robinat introduced the tourist resort complex to the Spanish coast by integrating homes, hotels, golf courses, spa centres and commercial premises into the same complex.

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Blackstone Crowns its Position as the Largest Property Owner in Spain

18 September 2018 – Cinco Días

Blackstone likes Spain. And specifically, the Spanish real estate market. In recent years, the fund manager has made several large purchases linked to property in the country, displaying its enormous financial capacity to handle operations of any size.

In fact, the fund has now become the largest real estate owner in Spain, where it owns assets worth more than €20 billion, according to the figure compiled by Europa Press, placing it well ahead of the largest Socimis, such as Merlin (€11.785 billion) and Colonial (€11.19 billion).

The fund quickly saw an opportunity with the Testa operation, given that some of the shareholders wanted to exit the company, such as the clear case of Merlin, and the willingness of Santander and BBVA to sell.

The acquisition of 50.01% of Testa Residencial from Merlin, BBVA and Santander for €948 million – an operation that is still open to the other shareholders – followed the very recent purchase of the Socimi Hispania, a transaction worth more than €1.9 billion. Initially, Blackstone agreed to acquire the 16% stake owned by the investor George Soros, and then it launched a takeover bid for the rest of the company. In that case, it acquired 46 hotels, which were added to the 15 it had already acquired from Sabadell and whereby the largest owner of rooms in Spain was born.

In July, Blackstone acquired a logistics portfolio from the Socimi Lar España for €120 million. And recently, it was revealed that Blackstone and Centerbridge had teamed up to submit an offer for Santander’s headquarters in Boadilla del Monte (Madrid) amounting to €3 billion, in a bid that ended at midnight yesterday.

In Spain, Blackstone’s largest operation was undoubtedly the purchase from Santander of 51% of Popular’s real estate business for €5 billion. But that was not its only bank-related deal. It also acquired the portfolio linked to the property of the now extinct entity CatalunyaCaixa. The fund created the company Anticipa Real Estate to manage those toxic assets and it has been putting some of those foreclosed homes up for rent through its various Socimis: Albirana and Torbel (flats acquired from Sabadell), which are both listed on the Alternative Investment Market (MAB).

Moreover, one of Blackstone’s first operations was also one of the most contested politically by the leftist groups, when in 2014, it acquired 1,800 social housing properties from the Town Hall of Madrid for around €130 million – those homes currently form part of the portfolio owned by the Socimi Fidere.

Blackstone entered the property market in Spain in 2014 on the hunt for bargains following the crisis, firstly focusing on bank portfolios. But the recent acquisitions of Hispania and Testa take the US giant in another direction. There is enormous liquidity in the market, which has given a great investment capacity to these funds. Now, it is sounding out opportunities in which to invest in through its funds in real estate as an alternative to public debt with higher returns.

This New York-based firm, which is led by Stephen Schwarzman (pictured above) as its President and CEO, is the largest manager of real estate funds in the world, with $19.4 billion in assets under management, according to its results for the first half of the year.

Original story: Cinco Días

Translation: Carmel Drake

Hispania Will No Longer Be a Socimi & Blackstone Will Channel its Future Profits via the Cayman Islands

13 June 2018 – El Confidencial

Following the green light granted by the CNMV – Spain’s National Securities and Exchange Commission – for Blackstone’s takeover of Hispania, the countdown has begun for the US fund to take control of the company, a milestone that is dependent upon it obtaining 50% plus one share and which, if no rival offer prevents it, could start to take shape on 13 July, when the term for the acceptance of the offer comes to an end.

From that moment on, Blackstone plans to exclude the Socimi from the stock market, which means that it will lose the benefits of the special tax regime, whereby it has been exempt from paying corporation tax in exchange for distributing at least 80% of its profits in the form of dividends, which are taxed at between 19% and 23%.

Blackstone’s decision will, therefore, have a direct impact on the public coffers, given that the conversion of Hispania into a limited company (SA) means that it will now be taxed as a company. Nevertheless, as is typical amongst these large investment vehicles, the fund has created a company structure aimed at financially optimising its tax bill for the duration of the investment period.

According to confessions made by Blackstone itself to the CNMV, the offer is being made through the company Alzette Investment Sarl, which was constituted on 2 February in Luxembourg for the purposes of this operation. Its only shareholder is Alzette Holdco Sarl, also a Luxembourg-registered company and itself wholly owned by BRE/Europe 9NQ Sarl, which is in turn controlled by BREP Investment 9NQ LP, an exempted limited partnership registered in the Cayman Islands.

As such, the ultimate parent company operates under a tax haven that ensures that it will be free from paying taxes for 50 years (…). In fact, the shareholders of BREP Investment 9NQ LP are different offshore companies owned by Blackstone, which are also covered by the exempted limited partnership structure of the Cayman Islands, with the exception of two, which are headquartered in the US tax haven of Delaware, and which are the entities that really benefit from this structure.

Flagships of opportunistic investment

Blackstone’s BREP funds are the US giant’s “flagships of the opportunistic investment funds”, according to its own definition in the takeover prospectus “with USD 75 billion of investment capital, a net return of 16% since 1991 and 1% of losses over 27 years”.

In order to raise the €1,589.6 million that Alzette will have to hand over if all of Hispania’s shareholders accept the terms of its offer (the fund already controls 16.5% of the share capital after it acquired the stake previously owned by George Soros), the different Blackstone funds have committed to contributing the money, either through capital, shareholder loans or other intra-group financing instruments.

In these types of company structures, the different loans arrangements made between the parent companies and their subsidiaries allow them to decrease the overall tax bill in the different countries in which the corporate chain operates in the form of the interest payments that the funds make to themselves and which allow them to “repatriate” the money invested to the Cayman Islands, at the same time as reducing the profit, and with it, the tax charge.

In the case of the takeover bid for Hispania, in addition, Blackstone is also planning to resort to lenders to raise financing amounting to €850 million, referenced to 3-month Euribor, plus a margin of up to 2.25% per annum, and with a maturity date of 15 May 2021, and with the option of being renewed for one more year.

Business plan

Similarly, in order to acquire the stake from Soros, Blackstone signed a financing agreement with Morgan Stanley for a maximum amount of €250 million, although in the end it only drew down €128.6 million. In terms of the financial commitments that Hispania currently has (€894.8 million), Alzette says that it is analysing different refinancing options, including both raising new debt and increasing the level of leverage.

In terms of the business, Blackstone’s plans for Hispania include completing the sale of the office portfolio, which the Socimi had to put on hold at the last minute, even though it had already reached an agreement with Tristán to sell it for more than €500 million, due to the presentation of the takeover bid.

By contrast, in terms of the hotel assets, which are the jewel in the Hispania’s crown, its intention is to hold onto the majority of them for between three and seven years, and transfer their management to the team at HI Partners, the company that the US fund acquired last year for €630 million and which it will likely end up merging with the Socimi.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Several Funds Acquire/Increase their Stakes in Hispania in the Midst of Blackstone’s Takeover Bid

11 June 2018 – Expansión

Blackstone’s takeover bid for Hispania has placed the Socimi firmly on the radar of investment funds. Since April when Blackstone announced its intention to launch a public share acquisition offer (OPA) for the Spanish Socimi, there have been continuous changes in the shareholding structure.

In terms of the funds who have been active, Fidelity has continued to back the company and has strengthened its stake to 9.64%. Prior to the takeover bid, the company’s stake remained at just over 7%.

Fidelity is the second largest shareholder of Hispania, behind Blackstone, which, after purchasing the stake owned by the Hungarian-born magnate George Soros, leads Hispania’s shareholder ranking, with a 16.56% stake.

Another one of the Socimi’s shareholders that has strengthened its weight since the takeover is Axa Investment Group, which now controls 4.14% compared to 3% before the takeover bid, and Bank of Montreal and BlackRock, which currently hold stakes of around 4.1% each, compared with 3.01% and 3.3%, respectively, that they used to control.

These shareholders constitute the hardcore nucleus of the company’s owners, together with the Mexican firm Canepa, which holds almost 6% through Tamerlane, and the Brazilian family office BW Gestao de Investimentos (BWG) with 3.7%.

New shareholders

In addition to the reference shareholders who have taken positions, Blackstone’s interest in Hispania has led to new interest from other shareholders.

The Norwegian fund, through its manager Norges Bank, has appeared to acquire 1.09% of the Socimi; Man Group, one of the largest hedge funds in the world, has bought 1.27%; and Kite Lake Capital Management has purchased 1.56%.

Blackstone’s takeover bid for 100% of Hispania at a price of €17.54 per share means that it is valuing the Socimi at €1,905 million. Hispania used to have a market capitalisation of €1,903 million and its shares closed trading on Friday at a price of €17.68 per share, slightly above the takeover price.

After Blackstone launched its takeover, Hispania’s Board of Directors engaged Goldman Sachs, UBS and JPMorgan as financial advisors and Freshfields and Uría Menéndez, as legal advisors, to analyse the terms of the offer and look for alternatives.

Expressions of interest

In a conversation with analysts in May, during the presentation of the group’s results, Cristina García-Peri, Director-General of Hispania, classified Blackstone as a “plausible” buyer, but she emphasised that other investors have been “very interested” in the Socimi and its hotel portfolio.

The American investment fund’s offer, whose brochure is pending approval by Spain’s National Securities and Markets Commission (CNMV) is conditional upon obtaining at least 50% plus one of the shares in Hispania. Moreover, the takeover is subject to a clause that prevents the sale of assets for an aggregated transaction value of more than 5% of the NAV (net asset value) (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Blackstone Formalises its “Hostile” Takeover Bid for Hispania

23 April 2018 – Valencia Plaza

Blackstone has submitted to Spain’s National Securities and Exchange Commission (CNMV) its request for authorisation for the takeover bid that it has launched over the Socimi Hispania, an operation worth €1.905 billion, which would see the US fund become the largest hotel owner in the country. The supervisor must now analyse whether the bid is admissible and, in the event that it deems that it is, assess the documentation for its approval. Only then will the period be opened for acceptance of the deal by the shareholders.

In this way, Blackstone has formalised its takeover bid for the hotel Socimi that it announced on 5 April, after it purchased 16.5% of the share capital from the investor George Soros and whereby became the company’s largest shareholder. The bid is effectively directed at the 83.5% of Hispania’s share capital that the fund does not yet control, by offering €17.45 per share, which brings the operation value to around €1.59 billion.

In the documentation submitted to the supervisor on Monday, Blackstone did not include any bank guarantee to secure that amount, although it did state that it would present such a guarantee within a period of seven working days that it has for that purpose. The consideration being offered by the fund represents a discount of 5.6% with respect to the share price of €18.50 at which Hispania was trading before the operation was announced publicly.

Blackstone is formalising the takeover bid after Hispania announced that it regarded the approach as hostile and that it will look for “alternatives” to the operation that improve the price proposed and, therefore, “maximise” value. The Socimi chaired by Rafael Miranda is pushing ahead with its intention to look for other options to the bid, given that prior to its formulation, and before it announced its intention to liquidate its assets by 2020, the firm had received expressions of interest from around half a dozen overseas investors.

For its part, Blackstone is looking to create a hotel asset ‘giant’, given that this deal would see it become the largest owner of this type of establishment in the country. The fund would add the 46 hotels that comprise the Socimi’s portfolio, most of which are located on the islands and in the main tourist areas of the country, to the fourteen establishments that it purchased last year from one of Banco Sabadell’s companies (HI Partners). Currently, and following the departure of Soros, Hispania’s main reference shareholders are overseas funds, including Fidelity, which owns a 7% stake, Conepa with 6%, and Bank of Montreal and BlackRock, with 3% each.

Original story: Valencia Plaza

Translation: Carmel Drake

Hispania Seeks “White Knight” to Improve Blackstone’s Takeover Bid

17 April 2018 – Expansión

Hispania is moving ahead and accelerating the search for a white knight to increase the bid for the Socimi. The real estate firm, which specialises in hotels, has engaged Goldman Sachs, UBS and JPMorgan, as financial advisors, and the law firms Freshfields and Uría Menéndez, as legal advisors, to look for alternatives to the takeover bid presented by Blackstone, which values 100% of Hispania at €1,905 million.

The US fund, which already controls 16.56% of Hispania, after it acquired the stake of the Hungarian-born magnate George Soros, announced its intention on 5 April to launch a takeover bid for the entire company at a price of €17.45 per share, which it would pay entirely in cash. The operation is conditioned on achieving the acceptance of at least 54,584,772 shares, which would allow Blackstone to take control of more than 50% of the total share capital. The US fund must submit its takeover prospectus to the CNMV before 4 May 2018.

Unsolicited offer

“Neither the Board of Directors of Hispania nor its management company, Azora Gestión, were aware of the aforementioned acquisition of shares by Bidco (a Luxembourg-based company controlled by Blackstone through which the operation would be carried out) or of its intention to formulate a takeover bid. As a result, it is an unsolicited offer”, confirmed the company yesterday in a statement sent to the CNMV.

Hispania also said that the Board of Directors will promote alternatives that “maximise” the value of the company. Blackstone has not been the only international fund to express interest in Hispania’s hotels. In this way, before Blackstone launched its bid for Hispania, five other investors expressed their interest in the Socimi without formalising firm offers, according to market sources speaking to Expansión.

Hispania is currently the largest hotel owner in Spain by number of rooms, with more than 13,100 rooms in 46 hotels and a gross value of €1,639 million (66% of its portfolio), and its purchase would represent a significant move that would place the buyer in a position of leadership at a time of strength in the tourism sector.

The manager’s roadmap

Until Blackstone’s takeover bid was announced, Azora’s roadmap involved: selling Hispania’s offices in a single transaction, an operation that had already been channelled towards the fund Tristan; selling the homes in a block deal; and expanding the hotel portfolio to also sell it as a block. Thus, Azora was planning to sell the whole company – without the offices or homes – with a transfer of control that would allow the continuity of the Socimi, before March 2020, when the entity marks its sixth birthday.

Hispania’s shares closed trading on the stock exchange yesterday up by 1.56% to €17.62 per share, in other words, 1% higher than the price offered by Blackstone.

Besides Blackstone, Hispania’s other main shareholders include Tamerlane, with a 5.99% stake, Fidelity (4.88%), BlackRock (4.02%), BW Gestao de Investimentos (3.64%), Axa (3.03%) and Bank of Montreal (3.01%). The US fund has already approached the company’s other shareholders to convey the benefits of the takeover.

The US fund’s offer for Hispania comes two months after Colonial successfully closed its takeover of Axiare. The Board of Directors of Axiare was also reluctant to accept the offer from its rival initially, however, in the end, it expressed a “favourable” opinion regarding the takeover.

Sources at Hispania affirm that the Board of Directors, with the assistance of the financial and legal advisors contracted, will pronounce on the takeover “in due course”. Hispania’s most senior executive body is chaired by Rafael Miranda, who was the CEO of Endesa until the energy company was taken over by the Italian group Enel. Meanwhile, Concha Osácar and Fernando Gumuzio, founding partners and directors of Azora Capital, are external directors.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Blackstone Begins its Conquest of Hispania by Acquiring 16.5% of its Shares

5 April 2018 – Eje Prime

Blackstone’s conquest of Hispania has begun. Whilst yesterday it was rumoured that the US fund was plotting a corporate operation involving the Socimi, today the mystery was revealed to all: the group (through Bidco) has purchased 16.5% of the company managed by Azora and is preparing to launch a takeover bid for 100% of Hispania, according to a statement submitted to Spain’s National Securities and Exchange Commission (CNMV).

The purchase by Blackstone has involved a disbursement of €315.37 million. Specifically, Blackstone has bought a package of 18.07 million shares in Hispania, equivalent to 16.56% of the share capital, at a price of €17.45 per share, which represented a discount of 5.67% on the price registered yesterday when trading of its shares was suspended (€18.50). The fund has purchased almost all of the stake held by George Soros in the Socimi, reducing his share to 0.11%.

Hispania’s share price plunged by 6.22% to €17.35 when trading was resumed after the purchase had been made public. Yesterday, at the end of the afternoon, the CNMV decided to suspend trading in Hispania Activos Inmobiliarios, which was listed at €18.50 at that point. Before the opening of today’s session, the CNMV decided to lift the suspension after the news of Blackstone’s takeover bid was revealed.

The offer will be subject to approval by the shareholders of the holding company, as a whole, of the number of shares necessary that will allow Bidco to take ownership of 50%, plus one share, of all of the shares in the company (including the shares owned by Bidco).

The deal will also be subject to approval (or to a lack of opposition by virtue of the expiry of the corresponding waiting period) by Spain’s National Markets and Competition Commission (CNMC).

Original story: Eje Prime

Translation: Carmel Drake

Blackstone Wants to Create a Hotel Leader with Hispania

5 April 2018 – Expansión

The investment fund Blackstone is considering a corporate operation involving the real estate group Hispania, as revealed by the online edition of Expansión yesterday. Financial market sources indicate that the fund is interested in the group’s real estate assets, rather than in Hispania’s company structure, and may make an offer shortly. Half an hour before the close of trading yesterday, Spain’s National Securities and Exchange Commission (CNMV) decided to suspend trading of the company’s shares when they had risen by 1.65% to €18.50 per share.

In the statement, the regulator indicated that trading would remain suspended “whilst the relevant information is communicated”. The Socimi’s asset portfolio amounted to €2.5 billion at the end of last year, of which €600 million corresponds to the 25 office buildings that it is looking to sell as part of its strategy to focus on the hotel management business. The transfer of that real estate portfolio is already on track and could materialise soon with its sale to the fund Tristan Capital. That portfolio would have to be excluded from the bid that Blackstone is considering, which would amount to around €1.7 billion, according to sources in the real estate sector.

Blackstone’s objective is to acquire Hispania’s hotel portfolio, the largest in Spain, taking advantage of the interest from its existing shareholders, including George Soros, to close their investments in Spain, which were initiated in 2014 and which are expected to be liquidated in 2020. To this end, the price set in the negotiations would have to come close to the valuation of the hotel portfolio, estimated at €1.638 billion as at December 2017, compared to its current market capitalisation of around €2.0 billion. The valuation of the portfolio reflects an important appreciation with respect to the purchase cost of the assets contained therein, in which Hispania invested just over €1.069 billion, and 42% more than the total allocated, including spending on renovations and updates to the properties.

At the end of last year, the Socimi reached an agreement with its until then partner in Bay, the hotel group Barceló, to acquire 100% of that subsidiary. According to the most recent accounts, Hispania’s hotels generated revenues of €129.67 million in 2017, up from €117.8 million recorded the previous year. Of that amount, €77.9 million was generated by properties in the Canary Islands, followed by €22.1 million contributed by hotels in the Balearic Islands and €8.7 million by hotels located in Madrid.

Blackstone is the international fund with the greatest exposure to the Spanish real estate sector, following several record-breaking operations. It owns assets worth €15 billion, including 51% of Popular’s real estate business, with a gross value of €30 billion, but acquired for €5 billion. Last year, it also purchased HI Partners, the hotel subsidiary of Sabadell.

Original story: Expansión (by R.Ruiz/R.Arroyo/M.Á.Patiño)

Translation: Carmel Drake