Riu Negotiates Sale of Retail Space in Edificio España to Corpfin

22 August 2018 – Eje Prime

Riu is taking action and, after falling out with Baraka, it now has a potential buyer for the retail space in Edificio España. The hotel chain is finalising the sale of this space in the property, which spans a surface area of 15,000 m2, to the Spanish Socimi Corpfin Capital.

On Tuesday, the Baraka Group announced that it is going to file a lawsuit against Riu for the hotel chain’s refusal to recognise in the deed the 15,000 m2 of retail space that had been promised to the company Baraka Renta following the sale of the building last year. Moreover, the real estate company has demanded that the renovation work on the building, which began in the autumn of 2017, be suspended.

Following the breakdown of the agreement, Riu is now finalising the sale to Corpfin, which, in the event that it goes ahead, will acquire an asset that will be worth €200 million once the renovation of the property has been completed, according to Expansión.

Corpfin Capital has been extremely active in recent months. Just a few weeks ago, the Socimi led by Ana Granado purchased two prime stores from El Corte Inglés in Madrid and Bilbao for €100 million, as reported by Eje Prime. Moreover, in the logistics sector, the company invested €8 million in the acquisition of an asset from Makro.

On the divestment side, in July, Corpfin completed the sale to the fund Swiss Life of thirteen retail premises for €83 million. That operation was carried out through the two Socimis that the company has listed on the Alternative Investment Market (MAB): Corpfin Capital Prime Retail II Socimi (Ccpr II) and Corpfin Capital Prime Retail III Socimi (Ccpr III).

Original story: Eje Prime 

Translation: Carmel Drake

RIU Submits Bid to Acquire Buena Vista Hotel in Tenerife for €71M

26 July 2018 – Preferente

The hotel chain RIU has submitted an offer to purchase a hotel in Tenerife that has been put up for auction following the bankruptcy of its owner and which the hotel chain has been managing for the last 10 years on a rental basis, according to El Confidencial.

The hotel company headquartered in Mallorca has offered €71 million for the Hotel Riu Buena Vista, located on Playa Paraíso in Adeja, which has just been put up for auction as part of the bankruptcy process that its owner has been immersed in for the last five years.

RIU has been renting the hotel for ten years and is now trying to take ownership of it, pending the outcome of the auction, which is expected to happen within a period of fifteen days. The chain claims that, given its status as the tenant, it has the right of first refusal over the property.

The chain led by Carmen and Luis Riu has four hotels in Tenerife and 7,000 rooms in total across the Canary Islands as a whole.

Original story: Preferente (by R.P.)

Translation: Carmel Drake

Catalonia Hotels Buys 2 Buildings in Málaga to Convert into 72-Room 4-Star Hotel

25 July 2018 – Press Release

Catalonia Hotels & Resorts has completed the purchase of two buildings in the historical centre of Málaga, whereby expanding its presence in Andalucía. This operation will involve an investment of €24 million, including the acquisition of both properties and the complete renovation of the existing homes. The purchase also involves the operation of 600 m2 of space devoted to retail premises.

The hotel, located at number 5 on the central Calle Puerta del Mar, plans to open its doors in 2020. Its installations will house 72 rooms, a restaurant, bar and fitness area.

This will be the seventh establishment for Catalonia Hotels & Resorts in Andalucía, where it already has two hotels in the town of Ronda, three in the city of Sevilla and one that it recently opened in the centre of Granada.

The company’s expansion department, led by Federico Holzmann, does not rule out continuing to study opportunities in the south of Spain. According to Holzmann, “Andalucía is a very attractive market for us, where tourism is continuing to grow. Towns such as Córdoba, Cádiz and Marbella, where we do not have a presence yet, could be interesting destinations for the expansion of our portfolio”.

At the national level, Catalonia Hotels & Resorts plans to open an establishment soon in San Sebastián and another in Bilbao, in addition to the expansions of its properties in Sevilla (Catalonia Santa Justa) and Menorca (Catalonia Mirador des Port).

In Europe, the chain is going to venture into the Italian market shortly with the upcoming opening of Catalonia Milano Centrale, and in Portugal with a new hotel in Oporto.

The 5 new projects share common traits, given that they will all be 4-star superior urban establishments, located in privileged, central and well-connected areas, and equipped with catering, leisure and wellness areas.

In addition, Catalonia Hotels & Resorts is going to expand its presence in the Caribbean with the construction of a 5-star All Inclusive resort on the Riviera Maya with 434 rooms located on the paradisiacal beach of Costa Mujeres.

Catalonia Hotels & Resorts 

A family run hotel chain founded in 1982 by the Vallet brothers. After starting out focusing on the real estate sector, the company inaugurated its first hotel establishment in 1983 to become one of the main hotel chains in Spain in just a few years. Currently, the company has 69 establishments, located in 22 different destinations: 57 hotels in Spain, two in Brussels, one in Berlin, 8 resorts in the Caribbean (4 in the Dominican Republic and 4 in Mexico) and one urban hotel in the city of Santo Domingo. At the moment, Catalonia Hotels & Resorts is a leading player in Barcelona, where it has more than 3,000 rooms.

Original story: Press Release

Translation: Carmel Drake

Spain’s Competition Authority Approves Minor’s Takeover of NH

21 July 2018 – Expansión

Minor’s takeover of the NH Hotel Group is moving forward. The Spanish National Securities and Markets Commission (CNMV) admitted the offer from the Thai company Minor on Thursday and then, yesterday (Friday), Minor obtained approval from the Spanish and Portuguese competition authorities (CNMC). In this way, the offer is conditioned “exclusively” on its approval by Minor’s General Shareholders Meeting, which has been convened for 9 August. The Thai company currently controls 29.8% of NH’s share capital and, in September, plans to complete the purchase of an additional 8.4% stake from the Chinese firm HNA, which will increase its percentage stake to more than 38%.

The company, which is offering to pay €6.40 per share (€6.30 following the payment of the dividend approved by the General Shareholders’ Meeting) has indicated that its objective involves controlling between 51% and 55% of the Spanish group and for the remaining shares to continue to be listed. If that limit is exceeded, the company will consider making way for the entry of a financial partner in the share capital. Minor has also said that its objective involves increasing NH’s dividend by 50% next year to €0.15 per share.

The Thai group recorded revenues of €1.4 billion in 2017, has a market capitalisation of €3.9 billion and employs 66,000 people. With this operation, Minor will strengthen its hotel presence in America and Europe. Minor has 161 hotels and 20,384 rooms, primarily in Asia and Africa, whilst NH has 382 establishments and 59,350 rooms. Currently, the only markets in which the two chains have a presence are Brazil, Portugal and the United Kingdom.

At the General Shareholders’ Meeting held in June, the Chairman of NH’s Board, Alfredo Fernández Agras, described the offer as insufficient. Moreover, the President of Hesperia and CEO of NH, José Antonio Castro, expressed his criticism of the operation and his dissatisfaction with the Thai group’s entry onto the Board of Directors, where it now has three representatives.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Meliá Sells 3 Hotels to Socimi Atom for €73.4M

13 July 2018 – Expansión

Meliá Hotels has announced an agreement with the Socimi Atom Hoteles, in which Bankinter holds a stake, for the sale of three hotels in Sevilla, Santa Cruz de Tenerife and Fuerteventura for €73.4 million.

The transaction, which will generate a net accounting profit of €6.6 million, includes the hotels Meliá Sevilla, Sol La Palma (Santa Cruz de Tenerife) and Sol Jandía Mar (Fuerteventura), respectively.

The establishments will continue to be operated by Meliá by means of variable rental contracts (25% of the total revenues) for periods of 5 years, with a maximum of 4 extensions at the discretion of Meliá and up to a maximum of 25 years.

The operation values each room at €66,000 and represents an EBITDA (result before depreciation and amortisation) multiple of 13.9 times.

As part of the agreement, Atom undertakes to invest €20.2 million in the three hotels, whereby allowing their “repositioning”. Thus, the price per room after the investment will amount to €83,000.

The hotel chain has said that this sale forms part of its “strategy to adapt the attributes of the brands of all of the establishments operated by the company”.

Original story: Expansión (by D. B.)

Translation: Carmel Drake

Apple’s Landlord to Build a 20,000 m2 Hotel in Central Madrid

27 June 2018 – El Economista

The Mexican Díaz Estrada family, owner of the Apple store in Madrid’s Puerta del Sol, has decided to launch a new hotel project in the heart of the Spanish capital. It will be a large complex, spanning almost 20,000 m2, which is going to be built on Calle Montera, in two adjacent buildings, one of which used to house the former Acteón cinemas for many years.

According to several sources in the sector, speaking to El Economista, the Latin American group has decided to re-launch this development now, although it has been working on it for several years. In this way, the family acquired numbers 25-27 Calle Montera in 2013 through its company Exacorp One. That building had been owned by the public company Madrid Espacios y Congresos, which purchased it in 2007 for €55.4 million during the reign of Alberto Ruíz Gallardón. The intention of the Administration was to renovate the property and give it a new lease of life as a hotel, but that operation was thwarted by the arrival of the crisis and the plummeting prices. In the end, it sold it for €34 million to Exacorp One, which, in 2015, also acquired the adjacent building (Montera 29-31) where the Acteón cinemas used to be located.

Now the group is going to convert both buildings into a 173-room hotel complex, according to the project plans to which this newspaper has had access. Thus, the company obtained the permits to carry out this project last summer and according to the same sources, may have already reached an agreement with a chain to operate the hotel. According to the experts, this project has sparked interest amongst all operators, especially those who still don’t have a presence in Spain. “It is a very iconic project in the heart of Madrid, where there are few developments of this size underway. Moreover, Calle Montera has undergone a very significant transformation in recent times, to improve its retail and restaurant offer”.

The construction of the new hotel will involve the complete demolition of the building at number 29-31 (the Acteón cinemas) in order to build a new building connected to the adjoining one. The 12-storey establishment will have one of the best terraces in the centre, spanning 654 m2 – housing a restaurant – with a swimming pool (…). The initial plans also include the installation of a gym, a bar, meeting and banquet rooms, as well as a function room for the hotel. In addition, the building will house five commercial premises.

This is not the first hotel project from the Díaz Estrada family, which is also the owner of the new Hyatt Centric, at number 31 Gran Vía. With that opening, the chain returned to Madrid in December 2017 after leaving the management of the Villa Magna nine years ago. The Hyatt name is precisely one that is being suggested as a possible contender to operate the hotel on Calle Montera, under one of the chain’s other brands, given that it could do so by reaching a double agreement with the owners.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Grupo Hotusa Buys Hotel Eurostars Gran Valencia from Atitlán

15 June 2018 – Expansión

Grupo Hotusa is continuing to increase its portfolio of assets under ownership. The corporation chaired by Amancio López Seijas has purchased the Hotel Eurostars Gran Valencia, which the company has been managing through its hotel chain Eurostars.

The investment firm Atitlán – led by Aritza Rodero and Roberto Centeno, son-in-law of the owner of Mercadona, Juan Roig – was the owner of 66% of the hotel, according to explanations from market sources speaking to Expansión.

The hotel, located in the upper part of Torre Ademuz, has 110 rooms and a 4-star rating. Specifically, the Eurostars Gran Valencia occupies the upper floors of the building located on Avenida de las Cortes in Valencia, between the Palacio de Congresos and the future Nou Mestalla stadium.

Horwath HTL has advised the sales process, which began last year and which has been delayed for months due to the complexity involved.

Other purchases

In addition to the Hotel Eurostars, the building houses two hotels owned by Ilunion, which used to be managed by Accor, as well as a gym and a parking lot.

With this operation, Grupo Hotusa is taking another step in the framework of its expansion and purchasing plan, which extends both nationally and internationally. In this way, in May, Hotusa purchased Hotel Barceló Thalasso, located in Estepona (Málaga) from Sabadell and in March, it acquired the hotels Eurostars Gran Hotel La Toja and Eurostar Isla de la Toja in O Grove, Pontevedra, from Banco Popular.

The hotel consortium created in Barcelona in 1977 closed last year with a turnover of €1.24 billion, up by 15%.

The Eurostars Hotels chain, created by Grupo Hotusa in 2005, has around 100 establishments in large Spanish capitals and other international destinations such as New York, Paris, Berlin, Rome, Naples and Venice. Moreover, the group owns more than 50 hotels through its Exe Hotels chain.

Meanwhile, Atitlán is continuing with the divestment of its hotel properties with this operation. In this vein, a few months ago, it sold a portfolio of six establishments to Atom, the Socimi promoted by Bankinter (…).

Original story: Expansión (by R. Arroyo & A. C. Álvarez)

Translation: Carmel Drake

Deloitte: 173 New Hotels will Open in Spain Between Now and 2021

9 June 2018 – Expansión

The tourist boom and interest in the real estate sector have boosted the hotel segment. So far this year, operations amounting to €2.4 billion have been closed and an acceleration is forecast for the coming months.

Spanish hotels are standing out as one of the most sought-after assets for investors in the real estate market. The tourism boom in Spain, which recorded its fifth consecutive record year in 2017 with the arrival of 82 million international visitors, coupled with the property boom, caused hotel investment to reach maximums in 2017 of almost €3.1 billion. Moreover, the commitment from investors to these assets will allow that figure to double this year.

According to data from the Hotel Property Handbook, compiled by Deloitte, to which Expansión has had access, €3.1 billion was transacted in the segment last year, which represents an increase of 44% YoY and accounts for 22% of all the investment activity undertaken in Europe, placing Spain at the head of the investment ranking behind only the United Kingdom, which accounted for 29%.

During the first five months of this year, more than €2.4 billion has been invested, which will be added to operations currently under negotiation amounting to around €4.2 billion, which are expected to close over the coming months, according to the study.

“So far this year, we have transacted an investment volume almost as high as that signed during the whole of last year. The private equity funds are proving to be the main stars of the activity, which may even double the figure recorded in 2017”, said Javier García-Mateo, Partner at Deloitte Financial Advisory.

Loans

That is in addition to the strong appetite from traditional Spanish credit institutions to finance hotel properties, due to the momentum of the sector. Their financing spans projects under development, including remodellings, repositionings and developments. In this sense, the most active banks in terms of senior lines of credit for these assets are CaixaBank, Santander and Sabadell.

Investors are betting on mega-operations and the creation of large portfolios, which will allow them to have a diversified business and gain bargaining power over tour operators.

This trend comes in addition to the interest from Asian players in hoisting their flags in Spain. For example, the emergence of the Thai group Minor in NH Hotel Group, which has reached an agreement to purchase HNA’s stake in the Spanish hotel chain and is studying a takeover bid for 100% of the company.

In this context, the large hotel groups have taken advantage of the boom years to invest in improvements in their asset portfolios although there is still a long way to go. The opening and renovation of hotels consolidated itself in 2017, with activity involving 74 hotels and 12,500 rooms, reaching cruising speed following a significant recovery in 2015 and 2016, with projects in 120 hotels and almost 17,300 rooms.

Over the next five years, investment in work to adapt the hotel stock is expected to amount to €2.2 billion.

According to the report, 65% of the hotel stock in Spain is obsolete, with an average age of more than nine years, which makes investment in capex the main priority if operators are to handle the competitive pressures and achieve better margins.

“The strong growth in tourism in Spain contrasts with average rates that are still excessively low in the holiday segment. The renovation of obsolete projects, combined with the arrival of international operators, will allow the repositioning of an offer that ought to compete on quality rather than quantity”, explains Viviana Otero, from Deloitte Financial Advisory.

By region, the Canarian archipelago, Andalucía and the Balearic Islands are the regions that require the greatest capex spending, accounting for almost 68% of the total.

This effort has contributed to an improvement in the main performance ratios of hotels. According to Deloitte, revenues per available room (RevPAR), one of the main profitability indicators, grew by 10% last year.

New openings

The strong performance of the sector also accounts for the new promotions and project renovations underway. Over the next four years, 173 hotels are expected to be opened in Spain containing almost 30,000 rooms. “53% of those will be new projects and 47% will be renovations. It is worth highlighting the importance that rebranding is gaining as a defensive strategy against the alternative destinations of Greece, Turkey and Croatia, said Patricia Plana from Deloitte Financial Advisory.

In terms of challenges facing the sector, the report highlights the saturation of certain destinations in the summer and the problems of co-existence alongside local residents in those regions, as well as the recovery of competitor countries in Southern Europe and the rise of holiday rentals boosted by collaborative economy platforms such as Airbnb.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Meliá to Open 1 New Hotel Every 15 Days During 2018 and 2019

7 June 2018 – Expansión

Meliá is accelerating its growth trajectory and is seeking to continue exporting its brands overseas. The Mallorcan hotel chain is planning to open 50 new hotels around the globe over the next two years. “This means that, on average, and with the exception of force majeure or unexpected events, we will be opening a hotel somewhere in the world almost every two weeks”, said Gabriel Escarrer Jaume, Vice President and CEO of the group at the General Shareholders’ Meeting yesterday.

The company ended last year with 375 hotels and 96,239 rooms in 43 countries. Of the total, 68% of the group’s hotels are located in Europe, the Middle East and Africa (EMEA), 33% in America and 9% in Asia-Pacific.

In this sense, the President of Meliá, Gabriel Escarrer Juliá, highlighted that expansion will continue to be a fundamental “motor” for growth. Escarrer Juliá explained that of the new openings planned until 2019, 20% will be located in EMEA countries, another 20% in the Mediterranean, 27% in America and another 33% in Asia-Pacific.

“Our bet for Asia-Pacific is clear if we consider that since 2013, we have more than quadrupled the number of hotels there to 45, including those that are operational and being opened”, he said.

Escarrer highlighted the operating performance of the company, which last year generated a profit, excluding capital gains, of €128.7 million, up by 27.8%, which allowed it to distribute a dividend of €0.1682 per share, in other words, €38.6 million.

Currently, 31% of the group’s EBTIDA, around €90 million, stems from the management of hotels. “This model allows us to generate high returns with minimal capital requirements since we invest in the acquisition of high-value management contracts and not in real estate assets”.

The CEO of Meliá underlined the effort undertaken in terms of digitalisation and quantified the investment in this area at €100 million over the last three years. That has resulted in the greater role of the corporate website in the business. The director explained that revenues proceeding from melia.com amounted to €520 million in 2017, up by 21%.

The director said that the group’s strategy involves continuing to rotate assets and strengthen their alliances with their partners to grow and improve the hotel portfolio. In 2017, Meliá spent €244 million maintaining and renovating its hotel portfolio.

“We have initiated a new valuation of our portfolio of assets, the global results of which we will have during the third quarter. I trust that the outcome of that valuation exercise will be positive.

Escarrer also referred to the challenges facing the company, including the push from new competitors such as Airbnb and the political instability.

Risk factors

“We feel very comfortable and confident of being able to fulfil the objectives of our strategic plan, although we monitor the main risk factors in our industry very closely, such as the evolution of the so-called collaborative economies and of processes that generate uncertainty, such as Brexit and the complex political situations in countries such as Italy and Spain”.

In any case, he reiterated the forecasts for 2018, with an improvement in RevPAR (average revenue per available room) (…) and an increase in margins of between 100 and 150 basis points.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Elliott & Minor Enter the Bidding for HNA’s Stake in NH

30 May 2018 – Expansión

The bidding to acquire the stake owned by the Chinese holding company HNA in NH is entering the home stretch. The Asian giant has set this week as the deadline for the receipt of binding offers for its 29.5% stake in NH, which will be diluted to 25.5% following the execution of the hotel chain’s convertible bonds that are currently in circulation.

The investment funds that have made it to the final round are Lone Star, which has joined forces with the US hotel chain Hyatt to launch its offer, as well as Apollo and Elliott, who have also expressed their interest. Meanwhile, Starwood Capital and Blackstone, which both analysed the operation, have been excluded from the process.

The offers from the funds fall in the range of between €5.50 and €6.00 per share, according to market sources. Yesterday, NH’s share price closed at €6.39. Other sources explain that the funds have signed a standstill with the company so as to not exceed 20% in NH following the operation and whereby avoid having to launch a takeover bid for 100% of the entity at a low price.

These funds have also been joined by the Thai hotel chain Minor, which last week acquired €30 million of Oceanwood’s shares, representing 8.6% of NH, for around €190 million. The agreement includes a pact whereby the manager concedes Minor the right to exclusively negotiate the purchase of the rest of its stake in NH, which, after the bond conversion, will amount to 9.5%.

If it were to acquire all of HNA’s stake, Minor would clearly exceed the 30% threshold that would oblige it to launch a takeover bid for the entire company. In that scenario, the Thai group, whose shares are traded on the Hong Kong stock market, would have a number of alternatives: sell some of its stake on the market, buy fewer shares from HNA or request permission from the shareholders to launch a takeover bid (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake