Tag: Highgate

Irea: Madrid Led Ranking For Hotel Investment In 2016 (€445M)

2 October 2017 – El Boletin

The strong outlook for tourism in Madrid is continuing to attract interest from investors, as shown by the fact that the Spanish capital was the largest focus for hotel investment in 2016, with a total volume of €445.3 million, according to the report “Five Keys Madrid vs Barcelona 2016 – 2017”, published by Irea.

Last year, Madrid recorded 13 transactions in total, the most notable of which involved the sale of Hotel Villa Magna to the Dogus Group. During the first half of 2017, the city of Madrid registered 6 hotel transactions, whereby doubling the number recorded in 2016, with a total volume of €312.9 million. By far the most significant operation in H1 2017 was the purchase of Edificio España by Riu Hotels, which is going to convert the property into a 650-room hotel in the heart of Madrid.

Meanwhile, Barcelona was relegated to third place in the hotel investment ranking in 2016, behind Madrid and the Canary Islands, but ahead of the Balearic Islands, with a hotel investment volume of €214.6 million. Six hotels were sold in the Catalan capital, containing 1,028 rooms in total.

Nevertheless, that investment figure represented a decrease of 38.8% with respect to the maximum reached in 2015, explained in large part by the price rise effect resulting from the hotel moratorium approved by the city’s Town Hall. The first half of 2017 was very active in terms of hotel transactions, with the sale of five hotels and a total investment of €230.2 million. The main transactions involved the purchase of 55% of Hilton Diagonal by AXA REIM (for a price per room of more than €300,000) and the acquisition of Silken Diagonal by Benson Elliot and Highgate.

Demand

Madrid also led the domestic ranking for the number of travellers last year and came second (after Barcelona) in terms of the number of overnight stays, with 9.0 million and 18.1 million, respectively. For another year, the Catalan capital was the leading destination in terms of overnight stays in 2016 (19.6 million); it received 7.5 million travellers, which represents an average stay of 2.6 days (vs. 2 days in Madrid).

The report highlights that in both markets, the behaviour of international demand has been excellent and it notes the growth of 10.2% in the case of Madrid during the first half of 2017, confirming the upwards trend driven by overseas tourists (…).

Supply

In terms of the hotel supply, Madrid recorded a total of 68,790 beds in the highest category (an almost identical figure to that of Barcelona) (…), with 5-star establishments accounting for 15% of the city’s hotel beds in 2016.

Although the statistical data do not reflect it yet, the recovery in the construction of new hotels in the capital is already evident – according to the report – and will be noted in the data for the coming years, given that short-medium term forecasts for Madrid indicate that more than 4,400 new hotel beds are going to available soon, led by major hotel chains and international investment funds, who are backing the city, given the strong outlook for its tourism sector (…).

Key indicators

The positive trend that Madrid has recorded in terms of demand, together with the stable evolution of its hotel supply, has led to the growth of operating results in recent years. The Spanish capital recorded an average RevPAR of €63.30 in 2016, up by 6.1% compared to 2015 and up by 32% compared to the minimum level recorded in 2013 (…).

Meanwhile, the profitability indicators for the hotel sector in Barcelona have also grown significantly in recent years. Revenue per available room experienced average annual growth of 2.3% during the period 2008-2016 (…). In 2016, RevPAR in Barcelona amounted to €95.90 (…) up by 5.2% compared to 2015.

Original story: El Boletin (by E. B.)

Translation: Carmel Drake

Irea: Hotel Inv’t In H1 2017 Amounted To €1,655M

10 July 2017 – Reuters

Attracted by encouraging forecasts in the hotel sector, domestic and international investors alike purchased 79 hotels in Spain during the first six months of 20176, for a combined amount of €1,655 million, according to a report presented on Friday by the consultancy firm Irea.

The consultancy said that the figure for the first half of this year exceeds the volume recorded during the same period a year earlier by more than double and “should allow the sector to break the historical record for investment reached in 2015, when more than €2,600 million was spent”.

The strong interest in the hotel segment is being driven by a significant increase in hotel rates and sustained demand from tourists.

Spain received almost 28 million international tourists during the first five months of 2017, which represents an 11.6% increase compared to the first five months of last year, when foreign visitor numbers exceeded historical records for the second year in a row.

Spain received a record 75.5 million tourist visits in 2016 and Cehat forecasts that this year the figure will exceed the threshold of 80 million visitors.

According to Irea, investment in the hotel sector was split almost equally between the holiday segment (52%) and the urban segment (48%).

Two deals stood out in the urban sector during H1: the purchase of 55% of the Hilton Diagonal (4* – 433 rooms) by Axa Investment Managers and the acquisition of Hotel Silken Diagonal (4* – 240 rooms) by Benson Elliot and Highgate, both of which were closed for prices of more than €300,000 per room, said Irea.

Meanwhile, in the holiday segment, the star buy was London & Regional’s purchase of a portfolio of 4 hotels containing 2,050 rooms in total from Starwood and Melià, for an estimated amount of €240 million.

According to data from Spain’s National Institute of Statistics, there are 15,855 hotels in Spain, with a total of 822,002 rooms.

Of the 31.5 million overnight stays recorded in May (the latest figures available), 71.3% corresponded to foreign guests and the remaining 28.7% related to domestic customers.

The expectations of another record summer have boost hotel rates in recent months. According to the latest report from Trivago, hotel prices in Spain rose by 14% YoY on average in June to reach €134 per night.

Original story: Reuters

Translation: Carmel Drake

British Groups Invest Heavily In Spain’s RE Sector

9 May 2017 – Expansión

The Grosvenor group is embarking on its first residential project in Spain, developing luxury homes in Madrid. It is following in the footsteps of other compatriot companies such as Intu, Taylor Wimpey and Benson Elliot.

One of the latest real estate companies to show its commitment to Spain has a history that spans 340 years. The firm in question is Grosvenor, the centuries-old British firm, which closed its first investment in the Spanish residential sector about two months ago.

The project chosen by Grosvenor for its arrival in Spain is a luxury residential development on the Golden Mile of Madrid. To this end, Grosvenor, through its subsidiary Grosvenor Europe, completed the purchase of a plot of land measuring around 820 m2, located at number 53 on Calle Jorge Juan, for the development of six exclusive apartments and one penthouse with views over the Retiro Park. (…).

Grosvenor’s operation on Jorge Juan forms part of a joint venture signed by the Asian firm Amcorp in July 2016, whereby it undertook to invest €70 million during the first phase. “We hope to build a significant real estate portfolio in Spain during 2017”, said sources at the British group, which was founded in 1677 by Sir Thomas Grosvenor, and which is nowadays one of the largest landowners in the United Kingdom.

In light of this commitment to Spain, Grosvenor, which has four divisions through which it operates in Europe, Asia, America and the United Kingdom, has strengthened its office in Madrid, led by Fátima Sáez del Cano, by hiring Miguel Silmi, who formerly served in interim roles at firms such as Altamira, owned by Banco Santander. (…).

Investment

Grosvenor’s commitment to Spain is not a unique case amongst the large British groups. “Investors from the United Kingdom have always liked the Spanish real estate market and they have invested throughout the economic cycle. For example, Heron International, which is known today for the shopping centres that it built in Madrid, Barcelona and Valencia, used to hold a significant portfolio of office buildings in Madrid, in the 1990s”, said Javier García-Mateo, Partner in Financial Advisory at Deloitte. (…).

Meanwhile, Benson Elliot has been present since 2011. That fund has just closed the purchase of the Hotel Silken Diagonal, together with the joint venture between Walton Street and Highgate. Previously, BE had purchased two other assets in Barcelona, which it has now sold. “Another British firm, London Regional, has purchased hotels and offices in Spain and has also taken advantage of the cycle to sell them at a profit”, said Rafael Bou, Partner in Real Estate at PwC.

“Having invested more than €2,147 million since 2011, British funds are the second most significant international investor in the Spanish real estate market, after the United States (…)”, according to Savills. During the first quarter of 2017, British firms have already made real estate purchases amounting to €550 million, according to Deloitte.

One example of this commitment is the return of British Land to Spain, which last year purchased the Nueva Condomina shopping centre in Murcia, and the more than €120 million that has been invested by the UK & European Investment group in operations in Madrid, Barcelona and Marbella. (…).

In addition to real estate companies and investment funds, some of the large British insurance companies are also placing their focus on the Spanish real estate sector, such as the case of Prudential and Aviva, which just closed the purchase of the Tormes shopping centre in Salamanca.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Benson Elliot, Walton St & Highgate Buy Hotel Silken Diagonal For €80M

4 May 2017 – Real Estate Press

The British real estate fund Benson Elliot and the joint venture created by Walton Street and Highgate, have completed the purchase of the Hotel Silken Diagonal, located in the 22@ district of Barcelona, which will be managed by Highgate.

The establishment, which is located on the Barcelonan avenue in the 22@ district, has 240 rooms spread over nine floors and will now be renamed the Gates Hotel Diagonal Mar Barcelona.

Benson Elliot reached an agreement with the owner, a group of investors led by Oak Hill Advisors, at the end of last year. Nevertheless, it has only just formalised the operation, with the participation of the other two investor partners.

The new owners have decided not to disclose the amount of the operation, but, according to real estate sources, the figure amounts to around €80 million.

It is the second operation that Benson Elliot and Walton Street have completed after they acquired a portfolio of eight hotels worth €420 million in October 2015. Moreover, three years ago, the British fund purchased a plot of land on which to build offices, which it sold to Colonial last year for €45 million. In addition, it sold an office building located in Poblenou to a fund managed by UBS for €80 million.

Benson Elliot was founded in 2005 and is headquartered in London. It specialises in real estate investments and currently has €1,500 million in assets under management.

Original story: Real Estate Press

Translation: Carmel Drake