Which Hotels Are Most Sought After By The Socimis?

22 June 2016 – Hosteltur.com

Javier Arús, Head of Investments at Hispania, spoke at a conference last week entitled “Spain: Hotspot for international hotel investment”, organised by the Real Estate Alumni Club of Instituto de Empresa at the IE Business School.

There, he highlighted that the number of operations involving asset repositionings are on the rise, such Hispania’s acquisition of the Ibizan hotel chain San Miguel last week for €32 million. That deal involved the purchase of three mid-range hotels in Ibiza, where significant investments will be made to reposition the properties and convert them into premium assets. This type of operation, “with hotels in very attractive destinations and excellent locations, allows us to develop new products, almost from scratch, and obtain very significant resturns on our investments”, said Arús.

The Head of Investments at Hispania also spoke about the contractual relationships that exist between the Socimi and the operators of the hotels it has acquired to date. He stressed his firm’s preference for mixed lease contracts, which guarantee a minimum level of rental income and offer a variable rental income component to complement the fixed revenue stream. (…).

Meliá’s commitment

Meanwhile, Ángel Luis Rodríguez, Vice-President of Portfolio Management at Meliá Hotels International confirmed that the hotel chain is not currently entertaining the possibility of structuring its assets under a Socimi framework. Rather, the firm has committed itself to the creation of a very specialised real estate manager within the existing company structure, without any need to legally separate the hotel manager’s assets. Moreover, it is focusing its efforts on investing in technology and in core assets. 80% of the hotels in its portfolio operate under management frameworks.

Rodríguez agrees with Javier Arús that there are excellent opportunities to be had from “measured” repositioning of vacation hotel assets. By way of example, he described Meliá’s Calviá Beach project and highlighted the increase in value and quality that it has represented for a tourist destination such as Magaluf. There, the chain, which operates 3,200 rooms, has adopted a deliberate strategy that has allowed it to increase RevPar (revenues per available room) in the area by between 70-80% in a short period of time and with a very limited Capex investment.

Its brand-focused strategy is allowing the company to “enjoy a ‘virtuous circle’: brand strategy + investment in repositioning = increase in ARR (average room rate) and RevPar – Greater client satisfaction and loyalty – Increase in asset value – Better segmentation of customers – Higher direct sales – Higher Returns”.

The three speakers (Javier Faus, President of Meridia Capital also spoke), all experts in the hotel sector, agree that Spain may be able to maintain the level of growth in the hotel sector, if its supply is renewed and updated to reflect the expectations of international tourists, who are genuinely very fond of our country. They also highlight the importance of professionalising the operation of assets and investing in technology to deepen client knowledge and loyalty.

Original story: Hosteltur.com

Translation: Carmel Drake

Hispania Buys 4 Hotels In Gran Canaria For €75M

21 October 2015 – Expansión

Hotel assets are whetting the appetite of investors once again and proof of this is the firm commitment made by the real estate company Hispania for that kind of establishment. The company, which channels most of its investments through its subsidiary Socimi Hispania Real, has spent €780 million buying hotel assets, out of a total amount invested (including debt) of €1,300 million since the company debuted on the stock exchange in March 2014.

“Hotels have been strategic assets for us ever since we launched Hispania, because we already had experience in Azora – the managers of Hispania – which manages 12 hotels through a fund”, explains Javier Arús, Head of Hotels at Hispania.

The latest milestone in this strategy has been the purchase of five hotels through two operations. Firstly, it has agreed the acquisition of Hotel Holiday Inn in Madrid for €25 million. (…).

Secondly, the real estate company has also agreed to purchase four hotels located in Maspalomas, in the south of Gran Canaria, which together have 1,183 rooms. “We have been working on this deal since April 2014. It has been a very complex process, given that the company filed for bankruptcy in June. Now we have drafted a proposed agreement to purchase the debt from the creditors and recapitalise the company, and we are waiting for the legal confirmation”. Hispania will invest €75 million to acquire these establishments (three 4-star hotels and one 3-star) and will spend a further €9 million on their repositioning.


Following these transactions, the company in which George Soros and John Paulson hold stakes, will have more than 9,000 rooms, spread across both the urban and holiday segment. Many of these hotel apartments are owned by Bay, the Socimi that Hispania and the hotel chain Barceló have just launched, in which Hispania holds a 80.5% stake.

Nevertheless, some of the assets that Hispania owns outright could also be moved into the joint venture. “The Dunas portfolio – recently acquired in Gran Canaria – or Bahía Real – in Fuerteventura – may end up in Bay, since it would be logical for the whole holiday portfolio to end up in this company, some operations that must be approved by the Socimi’s Steering Committee”.

Currently, Bay owns 11 hotels, managed by Barceló, with 3,946 rooms, to which Hispania will soon add another five establishments also managed by its partner.

Hispania plans to continue on its shopping spree, despite the fact that there are many investors looking for opportunities in the Spanish hotel sector. “The market in Spain is very large and there has been very little institutional money until now, since investors used to be the hotel chains themselves. We will continue working to sign a couple more operations before the end of the year”, said Arús.

Between January and September, total investment in the hotel sector amounted to €1,273 million, up by 54%, according to the consultancy firm Irea, which forecasts that 2015 will surpass the record of €1,780 million registered in 2006. JLL estimates that that figure will reach €2,000 million. The experts in the sector agree that (this level of) investment will continue into 2016.

Original story: Expansión (by R. Ruiz and Y. Blanco)

Translation: Carmel Drake