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

Chinese Group Gaw Capital Joins Forces with Alicia Koplowitz to Target Hotel Sector

25 July 2018 – Expansión

The Chinese fund manager Gaw Capital Partners is making its debut in the Spanish hotel sector hand in hand with Omega Capital, the family office owned by Alicia Koplowitz. Specifically, the investment firm specialising in real estate assets has purchased 50% of the Hospes Hotel Group, worth €125 million, and has created a joint venture together with Omega Capital – with which it will share the ownership – for the development and expansion of the Spanish chain.

Before the entry of Gaw Capital Partners, the hotel chain was owned in equal parts by Fonsagrada – a company owned by the Koplowitz family -; the Areyhold group, owned by the Yera family; and Telescom, owned by the Hernández López family.

Hospes, founded in 2010, owns nine boutique hotels located in Alicante, Cáceres, Córdoba, Granada, Madrid, Mallorca, Salamanca, Sevilla and Valencia. The company’s establishments, which are all four- and five-star properties, are located in unique buildings that are rich with historical and architectural heritage.

According to the results for 2016 (the latest available in the Mercantile Registry), the chain generated an operating profit of €10.5 million, up by 18% compared to the previous year, and sales of €30 million.

Growth in Europe

The purchase of 50% of Hospes by the Chinese fund has been carried out through the fund European Hospitality Fund I, managed by GCP Hospitality, its hotel division.

GCP Hospitality, founded by the shareholders of Gaw Capital Partners and by Christophe Vielle in 2008, currently manages 39 assets (hotels, apartments and university campuses) and 7,450 rooms around the world.

GCP Hospitality, led by Vielle, has regional offices in Bangkok (Thailand), Beijing (China), Hong Kong (China), Perth (Australia), San Francisco (USA), Singapore and Rangoon (Myanmar).

Vielle, CEO of GCP Hospitality Management, explains to Expansión that, with the good outlook for the European tourism industry, the company is “actively” studying ways of expanding its portfolio across the Old Continent.

“We will take advantage of the reputation of the Hospes Hotel Group and our international network to raise the profile of the brand”, says the CEO GCP Hospitality Management.

In this sense, the evolution of the Spanish tourism sector in recent years has been spectacular. Spain recorded a new milestone last year with the arrival of 82 million international tourists and has also registered eight consecutive years of growth in terms of tourism GDP. For Vielle, the acquisition of Hospes Hotel Group is an example of the “solid track record” of GCP Hospitality in the launch and management of successful hotels and first-rate brands.

Since its creation in 2005, Gaw Capital Partners has raised almost USD 10 billion (€8.557 billion) and currently has USD 18 billion (€15.403 billion) in assets under management. The fund manager, which is investing in different segments of the real estate market, has a significant presence in the Asia Pacific region and in the USA.

Promoting the brand

Meanwhile, the alliance with the Chinese investment fund manager allows Omega Capital to boost its investments in the tourism sector.

Hospes is not the only firm that Koplowitz is backing in the hotel sector through her family office. Specifically, Omega Capital, together with the Orient Express group (now Belmond) purchased the Madrilenian Hotel Ritz for €125 million in 2003. More than a decade later, in 2015, Omega Capital and Belmond sold that iconic hotel to a consortium formed by the Olayan family, from Saudi Arabia, and the Mandarin group, which manages the establishment, for €132 million. The property is currently closed for refurbishment.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake