Barcelona Accepts Seven Exceptions To The Hotel Moratorium

13 February 2016 – Expansion

Ada Colau´s  moratorium applied to the hotel sector in Barcelona in July last year did not catch the market by surprise, since a stoppage on the granting of new licenses was foreseen on her electoral program, while the hotel industry of the city was being reassessed. What surprised and angered the industry was the fact that the measure would affect projects already underway. 
Drivers of these establishments were quick to wield legal certainty to carry out their plans and threatened the City Council with highly expensive sues. 
The moratorium affected more than forty projects, some of them at a very early stage but others whose paperwork had been worked for months. Many of them alleged back then that they held a urban  certificate legally binding the council to accept licenses for processing and stating they were allowed to carry on with the project. 
The City Council, which at first denied this, has been six months later forced to accept these license applications. In total, seven requests have been accepted for processing, which will now come under consideration for compliance with the regulations. Among these seven projects we find Emin Capital, which bought Torre Agbar to open a Grand Hyatt, and Me que projects by Melia at Caspe Street. Two months earlier, Colau team had already unlocked Meridia Capital project in the former headquarters of Henkel and that of Amancio Ortega in the old headquarters of Banesto, where the opening of a hotel with Iberostar is planned. 
In addition to the ongoing projects that were affected by the measure, the moratorium adopted by Barcelona en Comú has stopped the investments in new hotel projects. Another immediate consequence was the rise in the value of existing establishments. Unable to open new hotels, investors have directed towards those which already had a license, those which have raised their sales expectations.

Concern     

The sector is now awaiting the development of the plan being made by Ada Colau on hotel regulation by neighborhood. Hotel entrepreneurs are worried that Mayoress has spoken of a possible “decrease” in some areas.

Original story: Expansion (by Marisa Anglés)

Translation: Aura Ree

JLL: Global Inv’t In Hotel RE Reached €38,590M In H1 2015

18 August 2015 – Cinco Días

Hotels have become a very desirable haven for investors. Private and sovereign funds and hotel chains are all committed to boosting these purchases. In fact, according to a report by the real estate consultancy JLL, a “new historical high” was reached during the first half of 2015, as acquisitions amounted to €37,590 million.

“All indications show that 2015 is going to be a record year for hotel transactions at the global level”, says JLL in a statement, “driven by significant overseas investment”. During the first half of 2015, the largest volume of transactions was recorded on the American continent, with €21,490 million changing hands in total – that figure reflected an increase of no less than 73% YoY. Next in the ranking was EMEA (Europe, the Middle East and Africa), with an increase of 55% to €13,430 million.

The consultancy had predicted that the volume of transactions in the hotel sector would amount to €60,870 million in 2015. “We have already reached 60% of that figure during the first half of the year, and so if the level of activity continues into the second half of the year, then we may actually exceed our original forecast”, say JLL.

“The clear improvement in the main hotel markets in Europe and USA, the general economic recovery and the availability of debt with interest rates at historical lows are some of the drivers behind the increase in the level of investment at the global level in 2015, strengthening the trend that began in 2013”, explains Carlos Ortega, Vice-President of the JLL Hotels & Hospitality Group.

Although US private equity firms continue to be the main source of capital, the number of transactions involving investors from mainland China and the Middle East increased significantly during the first half of 2015 – their contribution to the global hotel real estate sector amounted to €8,775 million, compared with €2,060 million a year earlier.

The major transactions closed so far this year have involved several sovereign funds, such as the Abu Dhabi Investment Authority, which acquired the Grand Hyatt in Hong Kong, the Reinaissance Harbour in the same city, and the Edition in New York. The largest sale was closed by the hotel chain Hilton, which sold the Walforf Astoria in Manhattan for €1,745 million.

These investors are looking for trophy businesses, in other words, iconic buildings in large cities that guarantee high returns and have secure customer bases. “Europe, with Paris and London as the major capital cities, continues to be one of the best destinations for agreements involving trophy assets, and hence is where the Middle Eastern sovereign funds continue to show most interest”, says Ortega.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

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