Hispania Negotiates New Strategic Focus With Soros

29 December 2016 – El Confidencial

It hasn’t always been a Socimi. When it debuted on the stock market on 14 March 2014, Hispania Activos Inmobiliarios was an investment company owned by a Socimi, a structure that had chosen very carefully, given that the formula allowed it, amongst other things, to acquire assets by purchasing debt, like it did, for example, with Hotel Guadalmina, its first major operation in the most tourist segment of the real estate business.

But there was another more fundamental reason for adopting that structure: the limited life period that it was born with. Unlike the other three large Socimis – Merlin, Lar España and Axiare –which fired the starting gun from the get go in this booming sector, Hispania was created in accordance with a detailed timetable that included three investment years and another three divestment years, as the company explained in detail in its IPO prospectus.

Nevertheless, the company left the door open to expand this horizon, provided it received the green light from its shareholders at the General Shareholders’ Meeting, a date towards which the team at Azora, Hispania’s management firm, is now working. Azora is finalising a new proposal with the aim of receiving the approval of its investors in March, when the vehicle will celebrate three years of life.

According to several sources, the now Socimi (it adopted this company structure just before the summer) is negotiating with its main shareholders, led by George Soros, not only to extend the company’s life term, but also to adopt a new value proposition, based on specialising increasingly in hotels, to the detriment of offices and homes, and in modifying the management policy. Hispania itself has declined to make any comments in this regard.

The Hungarian magnate’s confidence in Hispania was underlined during the company’s latest capital increase, which he subscribed to in accordance with his proportional share, and in the messages that he has sent to the Azora team, in that he is willing to continue to back the company, but that he wants to make a series of changes that will directly affect the interests of the management company.

According to the same sources, Soros is interested in internalising Hispania’s management team in some way, rather than having it operating externally as it does currently, and in modifying the fee policy, which the management contract splits into a fixed part, the base fees, and a variable part, the incentive fees. The first is a commission linked to the investment percentage of the initial net funds raised through the IPO; and the second is a commission relating to the level of returns obtained from the investments.

Strategic change

Since its creation and until the third quarter of 2016, the last period for which official figures are available, Hispania has invested €857.1 million in hotels, €395.3 million in offices and €177.9 million in the residential sector, bringing its total investment volume to €1,430.3 million, almost three times more than the amount it raised through its debut on the stock market (€500 million).

It was then that Soros appeared as the company’s major shareholder and anchor investor, and that is a role that he continues to play today, controlling as he does 16.67% of the shares. (…).

In recent months, the company has undergone a major reorganisation of its structure, with the conversion of all of its subsidiaries into Socimis and the absorption of them. All of these steps are oriented towards the same purpose, to convince the shareholders of the appropriateness of continuing to back this vehicle. Albeit, with a new road map. The proof will be in the pudding in March.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Merlin Competes With Hispania To Become Largest Hotel Socimi

26 July 2016 – Expansión

Merlin, which has incorporated several hotels into its portfolio following its purchase of Testa, now owns 24 properties worth €654 million. Merlin is the largest real estate company and Socimi in Spain.

The merger between Merlin and Metrovacesa will create the largest real estate company and Socimi in Spain, market leader in the office segment and with a leading position in the shopping centre sector. In addition, the new Merlin will be one of the largest hotel lease operators in Spain, which will allow it to catch up with Hispania, the Socimi in which the investor George Soros holds a stake.

Following the integration with Metrovacesa, Merlin will go from owning 12 hotels worth €398 million to having 24 hotels with a gross asset value (GAV) of €654 million. In this way, the new Merlin will increase the value of its assets by 1.6 times following the integration, which is expected to be closed during Q4 2016, after the competition authorities and the general shareholders’ meetings of both companies have approved the deal.

By number of rooms, the union of Merlin and Metrovacesa will give rise to a hotel lease giant, with almost 4,500 rooms and a gross yield of 5.8%. The operation will also allow the group to increase the appeal and liquidity of its hotel division. The hotel business will account for around 7% of the new Merlin, which will have an total asset portfolio worth €9,300 million.

The company’s integrated portfolio of assets will include hotels as iconic as the Eurostars de las Cuatro Torres, inherited from Testa and the Barceló Torre, inherited from Metrovacesa, both located in Madrid.


For the time being, Hispania leads Spain’s ranking of the owners of hotels operated and managed by third parties, both in terms of the number of rooms and asset value. At the end of the first quarter, Hispania’s hotel portfolio included 8,234 hotel rooms in total, across 27 hotels, as well as two shopping centres and a plot of land, with a gross value of €862 million. In addition, in March, Hispania acquired the mortgage debt of Dunas Hotels & Resorts from several financial institutions, whereby acquiring 1,183 rooms in four hotels. The group, which owns the Hotel Guadalmina Spa & Golf (Marbella) and the Holiday Inn Bernabéu (Madrid) also bought the Hotel Oasis Resort (Lanzarote) last week. Following that operation, Hispania now owns 35 hotels and more than 10,400 rooms. Merlin’s hotel lease contracts all involve fixed rents, whereas Hispania operates using all types of lease contracts. Some include variable components linked to the evolution of the business. Currently, that is the most common type of lease contract in the hotel sector.


Nevertheless, Merlin has described its hotel division as “non strategic”, “which means that, in the medium term, it will be looking for a way out of this arm of its business”.

Sources in the sector believe that, if it chooses to exit the hotel business in a single transaction, then we will see a record-breaking operation in the hotel market. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Acquires 2 Hotels In Canary Islands For €105M

19 June 2015 – Hispania Press Release

Hispania Activos Inmobiliarios, S.A., through its 100% subsidiary company Hispania Real SOCIMI, S.A.U., has acquired the Gran Hotel Atlantis Bahía Real (pictured above) and the Suite Hotel Atlantis Fuerteventura Resort, both located in the Canary Islands. The Gran Hotel Atlantis Bahía Real is a 5* GL hotel and is the landmark hotel in Fuerteventura. It falls into the category of trophy assets within Hispania’s portfolio, along with the Hotel Guadalmina Golf in Marbella.

These two acquisitions provide new flow to Hispania’s investment in vacation hotels, which is being developed along with Grupo Barceló, and it strengthens its presence in the Canary Islands, a key market in the company’s resort hotel strategy.

The €105 million price implies a 10.5x multiple of GOP during the last twelve months to March 2015. Based on the results as of March 2015, the Gross Yield of this investment stands at 8.5%, whilst the Net Yield is 8.0%. The amount paid for both hotels has been fully disbursed using Hispania’s own funds.

Grupo Atlantis will continue as the operator of both hotels, which are very well maintained, under a rental contract with a variable component that includes a minimum guaranteed fixed rent. The agreements reached with Grupo Atlantis include diverse incentive schemes linked to the results obtained by the operator as a result of the management of the hotels.

Gran Hotel Atlantis Bahía Real

The Gran Hotel Atlantis Bahía Real is a 5* GL hotel with 242 room –inaugurated in 2003. It provides direct access to the beach and is located just a few minutes away from the Natural Park of Las Dunas de Corralejo, which was recently named one of the best beaches in Spain. This is the landmark hotel in Fuerteventura and one of the most prominent ones within the 5* GL category in the Canary Islands as a whole.

Suite Hotel Atlantis Fuerteventura Resort

The Suite Hotel Atlantis Fuerteventura Resort is a 4* hotel with 383 room, also located in the North of Fuerteventura Island, in Corralejo. It has 3 restaurants, 7 bars, a spa, 7 outdoor swimming pools, 3 tennis courts and garden areas, all of which is distributed across a surface area of approximately 50,400 square metres.

Original story: Hispania Press Release

Edited by: Carmel Drake

Hispania’s Hotel Socimi Evaluates Potential New Partners

14 May 2015 – Cinco Días

Bay, the hotel vehicle created by Hispania and Barceló, wants to strengthen its growth. The Socimi, which specialises in the Spanish holiday hotel segment, is seeking to expand its assets and obtain a critical mass with which to debut, first on the MAB, and then on the main stock exchange.

The head of the hotel sector for Hispania, Javier Arús, has acknowledged that the Socimi is interested in continuing its purchase of assets in the Canary Islands, the Balearic Islands and on the coast. For the time being, the vehicle owns 11 hotels and 3,946 rooms, expandable to 2,151 more, as the result of an agreement with Barceló, which has required an investment of €421 million. According to Arús, this amount (of total investment) will have to increase to €1,000 million to ensure the appropriate “critical mass” for floatation on the stock exchange.

A few weeks ago, Hispania revealed that it had secured €545 million to invest in assets after completing a capital increase, which involved the accelerated placement of 27.53 million shares. This financial muscle will allow it to make the upcoming purchases amounting to €200 million that it announced recently. Within the hotel sector, Hispania announced in November that it was in the advanced stages of studying a transaction amounting to €40 million involving a hotel asset in the Canary Islands with 700 rooms.

At a conference about hotel investment in Spain organised by Garrigues and Cehat (la ‘Confederación Española de Hoteles y Alojamientos Turísticos’ or the ‘Spanish Confederation of Hotels and Tourist Accommodation’, Arús said that Bay is (currently) analysing the entry of family hotel groups, either through cash or hotel assets. “There is a huge opportunity to grow in (terms of the number of) rooms”, said the executive, who pointed to the possible scaling up of Bay’s model within the Spanish holiday segment.

The investment vehicle created by Hispania and Barceló expects to own assets managed by different operators, not just the Mallorcan group. In fact, Arús revealed that Barceló is not expected to operate the next few hotels that the Socimi acquires.

As well as creating the Socimi with Barceló last year (and taking a 80.5% controlling stake), Hispania purchased the Hotel Melia Jardines del Teide for €36 million, two NH hotels in Madrid for €42.15 million and the Hotel Guadalmina in Marbella for €21.5 million, as well as a hotel from the Vincci chain. The company has not ruled out transferring these assets to Bay during the second half of this year.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake