Tag: hotel segment

Alantra Leases 5,000 m2 of Office Space in Rivas Futura (Madrid)

27 February 2019 – Eje Prime

Alantra Reim has leased 5,000 m2 of offices in 521HUB, the business park that the company manages in Rivas Futura (Madrid). The complex comprises two twin, independent buildings located on Calle Marie Curie in the Madrilenian municipality, which span a total surface area of 43,500 m2.

With this operation, Alantra Reim, the Alantra Group’s real estate investment and asset management platform, is starting to occupy Building I in this business park, which the company purchased in July 2018 from the Spanish family office Autocampo. The other twin building is leased almost in its entirety, according to a statement issued by the company. This operation has been advised by the consultancy firm CBRE.

The 521HUB business park is located between the towns of Rivas Futura and Rivas Vaciamadrid, just twenty kilometres from Madrid, and has office spaces available from 1,500 m2 up to 17,000 m2.

In addition to its office assets, Alantra Reim, led by Luis Iglesias, also operates a line of business in the hotel segment. Last year, in Spain, it acquired the Islantilla resort in Huelva and Hotel Denia La Sella in Alicante.

Original story: Eje Prime

Translation: Carmel Drake

Deloitte: Tertiary Real Estate Inv’t Amounts to €9.7bn in 2017

27 December 2017 – Expansión

An increase in property prices has led to a 22% reduction in the purchase of non-residential assets in 2017 with respect to 2016.

The boom that has marked the real estate investment sector in Spain since 2014 is starting to show signs of slowing. That is according to the most recent non-residential investment figures, which, with just a few days to go before year-end, are reflecting a decrease of 22% with respect to 2016.

According to a market study performed by Deloitte Real Estate, investors spent €9.7 billion this year on tertiary properties (offices, hotels, commercial and logistics assets) compared with €12.4 billion in 2016 and €11.8 billion in 2015.

“With just a few operations still left to close before 31 December, which will amount to between €0.5 billion and €0.6 billion, tertiary investment has fallen by 22%. This decrease in activity is a sign that we have crossed the equator of the bullish cycle and that we are possibly starting a period of greater stability”, explained Javier García-Mateo, Partner in Financial Advisory at Deloitte.

The 22% decrease is due to a weaker second half of the year in terms of the rate of investment (…). During the third quarter, investment fell from €6.6 billion in 2016 to €1.6 billion this year, says Deloitte in its report. During the fourth quarter, the difference was a decrease of 42% (€2.8 billion compared with €1.8 billion). The decrease is more pronounced in the property segments that tend to lead absolute investment, namely, offices and retail assets. In the case of the former, investors have spent €2.3 billion in 2017, less than half the amount recorded in 2016 (€4.9 billion) and 2015 (€5.3 billion) (…). “Offices tends to be the segment that traditionally leads investment, but this year it has decreased by 55%. This is not due to a lack of supply, but rather the gap between the expectations of sellers and the offers from buyers. Moreover, some operations have been abandoned, such as the sale of Hispania’s portfolio”, said García-Mateo.

In this way, unlike in previous years, where large operations were closed during the final quarter of the year, such as Torre Foster – sold for €490 million at the end of 2016-, Torre Espacio – sold in November 2015 for €550 million – and Torre Picasso – sold for €400 million in December 2011 – this year, the most significant operation has been the sale of 50% of Torre Caleido on Paseo de la Castellana, for around €150 million, closed during the first quarter of the year.

In the case of retail assets, investment in shopping centres fell by 29% to €2.7 billion, despite record operations such as the one involving Xanadú, whilst the purchase of shops fell by 36% to €421 million.

“After 4 years of increases in valuations and the consequent decrease in yields, investment in offices and retail property is significantly less attractive than in the hotel and logistics segments, where there are up to 3 points of differential per year”, say the sources at Deloitte. The large hotel operations this year have included the purchase of Edificio España by the Riu Group and the sale of HI Partners, along with its 14 establishments, by Banco Sabadell to Blackstone for €630.73 million.

Cataluña

The 22% decrease comes at a time that is being characterised by the independentist challenge in Cataluña, although the uncertainty being generated in that region does not seem to have had an impact on real estate investment, at least not yet, according to García-Mateo. “In Cataluña, the absorption of office space has fallen and sales in shopping centres have also decreased, by around 10% with respect to Q4 2016, but investment has not been hit, as evidenced by Meridia Capital’s recent purchase of the Barnasud shopping centre and Invesco’s acquisition of the Mango facilities in Palau de Plegamans (Barcelona)”, he added.

In this way, the experts justify that the decrease in investment is due to a change in the cycle, following four years of rapid growth (…).

Nevertheless, the €9.7 billion spent during 2017 represents the fourth-highest figure in the historical series (dating back 13 years).

It was only in the last two years, as well as in the record year for the sector (2007), when investment amounted to €12.6 billion, that investment in non-residential assets exceeded the €10 billion threshold, according to Deloitte.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

STR: Spain’s Hotels Are The Most Profitable In The World

7 November 2016 – Hosteltur

Spain’s hotel industry is one of the most profitable in the world, according to Javier Serrano, Director of STR for Spain and Portugal, who was speaking at a conference entitled “Marketing hotels in the digital age”, organised by the ITH (Technological Hotel Institute). Proof of this comes from the double digit increases in RevPar (revenue per available room) seen during the first nine months of 2016 in the main Spanish capitals, with the exception of Barcelona (+8.9%) and Marbella (+8.2%), which are already well established markets.

According to Javier Serrano, behind these significant increases we find “the strong behaviour of groups, both in the vacation and MICE (meetings, incentives, conferences and events) sectors. Certain destinations, such as Zaragoza, are really benefitting from increased demand from groups. Zaragoza saw a RevPar increase of 20.5% during the first nine months of the year, thanks to the city’s initiative to reuse its old pavilions, built for the Expo, to host these meetings”.

Another contributing factor has been a change in strategy by many of the Chinese airlines, which have increased the frequency of their flights to the Peninsula. They are attracted by the safety of Spain as a destination, given that, according to the Head of STR in Spain and Portugal “the US and Chinese markets are more sensitive to security concerns”.

Meanwhile, the two island groups (the Balearic and Canary Islands), which have seen RevPar increases of between 15% and 17% “are also benefitting from higher demand (diverted from competing destinations currently suffering from political instability) and from the recovery in domestic tourism, together with the low price of oil, which is boosting transport”.

STR’s data reveals that during the first nine months of 2016, the RevPar of Spain’s hotels increased by 13.4% to reach €82.21, driven by an increase in the ADR (average daily rate), which rose by 8.5% to €109.38, and by a rise in occupancy rates, which grew by 4.5% with respect to the same period last year – a record high, according to Serrano, of 75.7%.

The recovery of Madrid

In terms of its average occupancy rate, Madrid has managed to surpass the magic number of 70% in 2016 and now has an average occupancy of 70.4%, up by 3.4% compared to last year, according to the Director of STR, “which means that establishments in the city can now play around more with prices”. Not surprisingly, the ADR in Madrid has increased by 7.1% to €97.29 and the RevPar has also increased by 10.7% to €69.46.

In this way, the capital is recovering as a city break destination, with figures returning to their pre-crisis levels, above all in the case of low-end and mid-range hotels, which, together with the luxury segment, are seeing the most activity. In 2015, Madrid surpassed Barcelona as the primary urban destination for hotel investment, although “investors’ interest in Spain has slowed somewhat in recent months due to the absence of a stable Government. As a result, demand has increased whilst supply has remained almost stable, which has benefitted those properties already in operation. (…).

Original story: Hosteltur

Translation: Carmel Drake

Quonia Buys Hotel Internacional In Barcelona For €11.25M

19 July 2016 – La Vanguardia

(…). The Catalan Socimi Quonia, which debuted on the Alternative Investment Market (MAB) on Monday, has acquired Hotel Internacional, located on Las Ramblas, 78-80, in Barcelona, for €11.25 million from the hotel group Husa, owned by the businessman Joan Gaspart.

In a statement, Quonia reported that the price includes the purchase of the property and its operating licence, and that the transaction has been advised by the firm Laborde Marcet. This hotel has a leasable surface area of 1,915 sqm; its upper floors are leased for hotel use, whilst its ground floor houses retail premises. The property was one of Husa’s last real estate assets in Barcelona, which is undergoing a major restructuring after emerging from complex bankruptcy proceedings.

Quonia debuted on the MAB on Monday at a price of €1.65 per share, which represents a market capitalisation for the company of €41.97 million. The Socimi holds a portfolio comprising properties leased for residential and commercial use located in Barcelona, Sevilla and Langreo (Asturias), with a total approximate gross leasable area (GLA) of 12,197 sqm, excluding one ground-level car park with 50 spaces and another underground car park with 93 spaces. (…).

Original story: La Vanguardia

Translation: Carmel Drake

Lar Assesses 10 New Deals In Spain Worth €1,000M

22 April 2016 – Expansión

The Socimi Lar España wants to maintain its pace of growth and to that end, it has set its sights on ten real estate operations worth €1,000 million. All of the assets are located in Spain, primarily in the shopping centre segment and, to a lesser extent, in the office and logistics segments, according to comments made yesterday by the Chairman of the Group, José Luis del Valle. He was speaking after the general shareholders’ meeting, at which a six-fold increase in the dividend for 2015 was approved, at €0.201 per share. In total, Lar will disburse €12 million.

Del Valle explained that the company has €200 million to invest, with not need to resort to the bond market or to carry out a capital increase. Currently, Lar España owns 24 real estate assets in ten autonomous regions worth €961 million. Of that figure, €686 million has been allocated to the acquisition of twelve retail spaces; €150 million to the purchase of four office buildings; €70 million to four logistics assets; and €55 million to its residential project on Calle Lagasca 99. Lar’s asset value increased by 5.4% between the Socimi’s launch in March 2014 and the end of 2015.

Miguel Pereda, CEO of Lar España, pointed out that, for the time being, the Socimi is not interested in the hotel segment and clarified that it will be analysing the real estate assets being sold off by El Corte Inglés when that process opens. The retail giant plans to sell up to 200 properties worth €1,000 million.

Original story: Expansión

Translation: Carmel Drake

Nyesa Puts Hotel Tryp Macarena Up For Sale For c. €50M

7 April 2016 – Expansión

The hotel real estate market in Sevilla is on a roll. In addition to several new projects, such as Hotusa’s plans for CaixaBank’s Torre Sevilla skyscraper and the hotel that will be opened in the former headquarters of Banco de Andalucía, promoted by Drago Capital, other properties are also now hanging up the ‘For Sale’ sign. According to local sources, another hotel that may soon change hands is the Tryp Macarena, one of the largest in the Sevillan capital.

The real estate company Nyesa has launched the sale of this property, located next to the Parliament of Andalucía, in the popular neighbourhood of Macarena. The starting price ranges between €40 million and €50 million, according to sources in the sector. The property has a four-star rating and 331 rooms.

Meliá is the chain that operates the hotel and the firm that sold it to the current owners in 2005 for €42 million. For the Bartibás family, which used to control the Horcona group, it represented its fourth hotel in Spain and the 25-year lease contract signed with the multi-national firm chaired by Gabriel Escarrer generated annual revenues of €2.2 million, according to Nyesa’s accounts.

According to sources at Meliá yesterday, “in most cases, when there is a transfer of ownership, the group continues as the manager, if that fits with the overall strategy”.

Nyesa Valores Corporación was created in 2008 from the integration of the real estate companies Nyesa and Inbesòs. Its huge debt, which exceeded €650 million at one point, forced it to file for bankruptcy in 2012, but it reached an agreement with its shareholders in 2014. Nevertheless, its shares are still suspended from trading and in 2015, its revenues amounted to just €2.6 million, compared with €186 million in 2008. After capitalising its debt, its shareholders include several banks, such as Popular (13.2%).

Original story: Expansión (by Lidia Velasco)

Translation: Carmel Drake

Irea: Hotel Investment Amounted To €2,470M In 2015

15 January 2016 – Expansión

Hotels are establishing themselves as one of the most sought-after assets in the real estate sector. The historically high RE investment level in 2015 boosted the hotel segment in particular, which accounted for 20% of total commercial real estate investment volumes during the year – excluding residential – compared with 11% in 2014, according to a report about the hotel investment market in 2015, prepared by the consultancy Irea.

Last year, 132 hotels were sold containing 29,081 rooms for €2,470 million, significantly more than the 50 operations that were closed in 2014. Moreover, properties worth €144 million were sold for conversion into hotels. In total, the hotel investment market amounted to €2,614 million in 2015, compared with €1,091 million a year earlier. Spain was the third most active country in Europe, behind the UK and Germany, and accounted for 14% of all European investment, up from 7% a year before.

54% of hotel investment in 2015 was focused on the holiday segment, which reflects “a return to normality for the Spanish market, where more sun and beach properties have traditionally been sold than city hotels”, according to Miguel Vázquez, Managing Partner of Hotels at Irea. This trend will be maintained in 2016.

The Canary Islands was the most sought-after region in 2015, accounting for 28% of total investment. It exceeded Madrid and Barcelona, where political uncertainty put investors on alert. By category of hotel, 62% of investment in the sector was focused on four-star hotels, although unique individual assets, such as the Hotel Ritz in Madrid (pictured above), were also sold.

40 of the 132 hotels sold were transferred through portfolio operations – involving two or more assets – and the Socimis were the main purchasers, together with domestic and international hotel chains, willing to invest in strategic assets.

Another significant milestone in 2015 was the purchase of land in Málaga for the development of new hotels, which was seen for the first time since before the crisis. Nevertheless, Vázquez thinks that, “land purchases will be few and far between in 2016: right now it is more profitable to buy a hotel and renovate it than to construct one from scratch and financial institutions are not ready to provide finance yet”.

Debt portfolios

Nevertheless, the experts do expect that there will be more operations involving the sale of debt portfolios secured by hotels in 2016. They amounted to €466 million in 2015. (…).

Irea expects that 2016 will be a good year, but the firm thinks that it will be difficult for the strong figures recorded last year to be repeated. Madrid will continue to be the preferred investment target and capital inflows there may have exceeded €582 million in 2015. Barcelona, where investors perceive more risk, will remain frozen to investment in new projects. For existing hotels, record figures in terms of price per room may be reached.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

Project Formentera: Santander To Sell €170M Hotel Debt Portfolio

18 May 2015 – El Confidencial

A new portfolio of hotel debt has just come onto the market. At a time when investors’ interest in these transactions is at an all time high, Santander has put loans worth €170 million relating to 17 hotels up for sale.

A new portfolio of hotel debt has just come onto the market. At a time when investors’ interest in these transactions is at an all time high, Santander, the largest Spanish bank, has decided to pique the insatiable interest of international funds in this type of transaction through the launch of an operation known as: Project Formentera.

It involves a portfolio of loans worth €170 million, linked to 17 hotels. The majority are located in the Community of Valencia and the Canary Islands, which encourages operations with investors interested, primarily, in the holiday segment and in the (Canarian) archipelago.

The portfolio that Santander has just launched joins those being promoted by two of its main rivals, BBVA and Bankia, which have also decided to take advantage of the window of opportunity that has opened to try to offload some of their debts, which include loans that the financial entities are very keen to divest.

According to sources in the market, unlike what may happen in the residential market – a business the banks know very well, since historically they have had the best prepared teams to manage such assets when they fail – the hotel business is a very specialised segment, whose incident rate (casuística) is more difficult for financial entities to manage.

This means that their priority, in general terms, is to try and sell debt, rather than foreclose it and take ownership of assets that they are much less familiar with than residential. If we add the insatiable appetite of the large international investors for the hotel sector, fuelled by the perfect combination of low prices and a strong recovery in the tourism sector, now is the perfect time to carry out these kinds of transactions.

A string of transactions

In fact, at the end of last year, Bankia closed the sale of a batch of hotel loans to Starwood and Sankaty for €400 million (Project Amazona) and is now finalising the second part of that transaction, known as Castle, whose finalists are Apollo, Oaktree and Bank of America. BBVA has also just opened the bidding for 14 hotels it inherited from unpaid loans, a process known as Project Otelo; meanwhile Sareb has just engaged N+1 to manage the sale of a portfolio with a nominal value of €500 million, which is linked to the property developer Polaris World, in an operation known as Project Birdie.

And so the list goes on. A few weeks ago, the German bad bank FMS Wertmanagement sold the portfolio known as Gaudí to Oaktree for close to €500 million – a batch of problem loans linked to, amongst others, the iconic luxury hotel Arts de Barcelona, as well as another high-end property in Cascais (Portugal), five shopping centres, including Plaza Éboli and Heron City, several storage buildings, and residential and industrial assets.

Moreover, the large financial entities that signed the €152 million syndicated loan with the Basque property developer Urvasco, which, in turn, owns the hotel chain Silken, have spent the last few months selling their stakes both in this debt, as well as in those linked to certain establishments, including the Puerta de America hotel in Madrid; Bank of America is taking advantage of this window to enter through the ‘front door’ of what is considered to be the last great Spanish hotel chain up for sale.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Hispania & Barceló Sign Binding JV Agreement

14 April 2015 – Press Release

After the successful completion of the due diligence process and in accordance with the agreed plan, Hispania Activos Inmobiliarios, S.A. has communicated to the Spanish Stock Market Regulator, CNMV, that its 100% subsidiary company, Hispania Real SOCIMI, S.A.U., and the Barceló Group have signed an agreement to define the terms of their joint venture, which has been established to allow the two companies to continue investing in hotel resorts in Spain. The terms of the agreement respond to those set in the framework agreement dated 24 February 2015.

According to Concha Osácar, Board Member of Hispania, “signing this agreement implies the formalisation of an investment that will be key for Hispania, considering the significant cash flow generation expected from the vehicle in the short term.”

According to Raúl González, CEO for EMEA at Hoteles Barceló, “this agreement will be key to enabling growth in the most important tourist areas in Spain”.

The main aspects of the agreement signed between Hispania and Barceló

On 24 February 2015, Hispania and Barceló announced a framework agreement for the creation of a JV, through which Hispania will acquire 11 hotels (3,946 keys) and 1 small shopping centre during the initial phase, with the option to acquire 5 additional hotels (2,151 keys) along with a second small shopping centre at a later date.

Once this transaction has been completed and the option for the 5 additional hotels has been exercised, Hispania will have invested circa €340 million, to obtain an 80.5% stake in the new joint venture. Grupo Barceló will maintain a 19.5% stake, with the option of acquiring up to 49% through future capital increases.

Barceló will continue to operate the hotels, which have been acquired by means of lease contracts for an initial period of 15 years.

The agreement signed by Hispania and Barceló will allow the JV to launch its ambitious plan to increase the portfolio of the new REIT, by means of acquisitions or further asset contributions. The goal is to, at least, double the size of the portfolio, creating a Spanish resort hotel portfolio with assets managed by diverse leading operators in this market.

Original story: Press release

Edited by: Carmel Drake

Hilton To Double Its Presence In Spain In 3 Years

14 April 2015 – Expansión

Growth / The US hotel giant, which is the second largest chain in the world, operates eleven hotels in Spain and is now backing its own growth in Madrid, Barcelona and Sevilla.

Hilton is redoubling its commitment to Spain. The US hotel giant, which is the second largest chain in the world by size (with 4,115 properties and 678,630 rooms at the end of 2013, according to the ranking published by Hotels magazine) manages nine hotels in Spain (66% through franchise agreements).

In addition, Hilton owns two other hotels, which are due to be incorporated into its network imminently, including the Reserva del Higuerón complex (in Málaga). Hilton will take over the reins there this summer and will thereby return to the Costa del Sol after (an absence of) more than 40 years.

“Our model is based on management; investment is undertaken by a partner, and it has been difficult to finance projects in Spain in recent years, but now the market is starting to open up and we have always been very interested in it”, says Simon Vincent, President of Hilton in EMEA (Europe, Middle East and Africa) and a member of the chain’s Board of Directors.

“The market in Spain is very fragmented, but we believe that opportunities exist for refurbish existing hotels and incorporating them into our network; furthermore prices are beginning to recover”, he adds.

In terms of the numbers, Vincent’s objectives are clear: “Doubling our size in Spain in two or three years would not be unreasonable, since that is what we have done in Turkey”. In Europe alone, Hilton operates 353 establishments and will incorporate a further 447 hotels (into its network) over the next three years. Barcelona and Sevilla are both on its priority list, but its primary focus in Spain will be on Madrid. “We were the first international brand (in Madrid), when we opened the Madrid Castellana Hilton in 1953 (today the Intercontinental) and the capital city is a high priority for the group and all of its brands”, he says.

At this stage, a priori, Hilton has ruled out forming an alliance with a local partner to accelerate its growth, like Marriott did with AC Hoteles in 2010.

Market consolidation

Vincent is very familiar with the travel sector; he has two decades of experience working for groups such as Opodo – today part of the eDreams Odigeo group – and Thomas Cook. He considers that if Spain lacks a large hotel group of its own, then “that is because the market is regional with strong (local) brands, which is precisely one of its strengths”. Nevertheless, “over time, there will be consolidation in the industry and the tour operators will want to participate and control the experience they offer their customers”.

In terms of the emergence of Socimis (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria or Listed Real Estate Investment Companies), which are similar to REITs in the USA, the executive belives that “they may help to professionalise the sector, because that is how the funds that invest in hotels work”.

In his opinion, “the key (to success) in the hotel sector is size at the global level. For Hilton, the most important objective is not to have a presence in as many countries as possible, but rather to bring the greatest number of customers as possible to those countries through our (its own) system”. This is demonstrated by its loyalty program, which has more than 40 million users.

With 12 brands, Vincent argues that Hilton’s success is “based on our ability to convert revenues into profitability and growth, because our brands are in very high demand”. Thus, 19% of the hotels that the chain will open around the world over the next few years will bear one of the Hilton’s own brands. Nevertheless, the door is open to new brands as well. “We think that there is still space (in the market)”.

Over the medium term, Hilton’s route map includes increasing its scale and enhancing its geographical diversification and the appeal of its brands, as well as promoting the digitalisation of its content, and expanding its distribution channels.

Hilton recorded revenues of (US)$10,502 million and profits of (US)$673 million in 2014 and predicts further growth again this year, both at the operational level, as well as in terms of its share price, which is currently trading at $30.38/share. According to Vincent, “we are very happy with our IPO, the foundations of our business are solid and the market acknowledges that”.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake