Hispania Invests €190M To Reposition Its Hotel Portfolio

25 September 2017 – Expansión

Hispania is going to invest €190 million to reposition its hotel portfolio between now and 2019 to maximise its value. At the end of the first half of the year, the Socimi managed by Azora owned a portfolio of 39 hotels and 11,059 rooms, most of which are located in the Canary Islands.

Some of the most strategic hotels, according to the presentation to investors submitted by Hispania to the CNMV on Friday, include the Hotel Club San Miguel (Ibiza), on which it is going to spend capex of €50 million; and the Hotel Holiday Inn in Madrid, acquired in 2015 and in whose modernisation, the Socimi is going to invest €34 million. In parallel, Hispania has another €100 million of capex budgeted for other potential projects.

In addition to the investment in the modernisation and repositioning of the establishments in its portfolio to superior categories, Hispania is basing its model on a diversified portfolio of operators – it works with Barceló, Meliá, NH and Vincci, amongst other hotel chains – and it has lease contracts that combine fixed and variable components. Its roadmap, according to the presentation, forecasts achieving cost savings through economies of scale, as well as enhancing direct sales.

Currently, 69% of the revenues from its hotels come through tour operators. Thanks to its asset optimisation strategy, Hispania expects to increase the value to its shareholders by more than €30 million in the Guadalmina and Holiday Inn Hotels. Meanwhile, in the portfolio as a whole, it hopes to generate €60 million of additional cash.

The company, which has not detected any impact on demand following the terrorist attack in Barcelona in August, expects revenues per available room (RevPar) to grow by more than 10% this year.

Original story: Expansión

Translation: Carmel Drake

Hispania Buys 3 Hotels In Ibiza For €32M

14 June 2016 – Expansión

Hispania has purchased 100% of the shares in the company Real Estate San Miguel, which owns three hotels in Ibiza – the Hotel Galeón (4 stars and 182 rooms), the Hotel Cartago (3 stars and 196 rooms) and the Hotel Club San Miguel (3 stars and 106 rooms) -, for €32 million.

In addition, Real Estate San Miguel is the owner of several apartments next to Hotel Cartago and a restaurant attached to the Hotel Club San Miguel. The assets are all located in Cala de San Miguel, on the beachfront.

Hispania will undertake major investments in these properties, depending on the final category (star rating) of the hotels and the outcomes of the negotiatios with the operators.

Investment in renovation work

Specifically, the Socimi controlled by Azora and in which George Soros owns a stake, plans to carry out a complete renovation of the three hotels at the end of the 2017 season. The initial planned investment amounts to €35 million.

The plans of the company, which debuted on the stock exchange in March 2014, involve maintaining the current operators of the hotels until the end of the 2017 season, when the management of the three assets will revert to a single operator.

Currently, Iberostar operates Hotel Galeón, whilst Stella Polaris is responsible for the management of the other two establishments. The Socimi will now analyse which hotel chain is, in its opinion, the most suitable to take on the management of its new hotels in Ibiza from 2017 onwards.

This operation, advised by Aguirre Newman, allows Hispania to strengthen its commitment to the vacation hotel sector in the Balearic Islands and, specifically, in Ibiza, where it already owns the recently repositioned Hotel Barceló Pueblo Ibiza.

Hispania also owns a stake in Bay Hotels & Leisure – the Socimi created together with Barceló in 2015, which also focuses on the vacation hotel segment – . The company’s share price fell by 4.3% on the stock exchange yesterday to close at €11.33/share.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake