Investors Spend €12,000M On RE Assets In 15m To Mar 15

5 June 2015 – Expansión

International funds, private investors and other companies have purchased assets worth almost €12,000 million during the last 15 months. American investors favour large properties, whilst Asians players prefer hotels.

The purchases of almost €12,000 million…mean that the Spanish market has returned to its pre-crisis levels and illustrate the focus that investors from around the world have placed on our country. But, what is the profile of these buyers? And which assets do they prefer?

According to data from the last 15 months, office buildings and shopping centres have been the star investments. Nevertheless, rather than making direct purchases, investors, both Spanish and overseas, have chosen to participate in the market through the new listed companies for real estate investment (Socimis).

For their stock market debuts, the four large Spanish Socimis – Merlin Properties, Hispania Real, Axiare and Lar España – raised funds amounting to more than €2,550 million; and this year they have undertaken capital increases to raise another €1,300 million…Hispania raised €550 million for the IPO of its Socimi subsidiary, from large international investors such as the US magnates George Soros and John Paulson. Just a few weeks ago, it raised a further €337 million from investors with a similar profile. Meanwhile, the real estate company GMP secured €300 million from the Singapore fund GIC.

Offices

The four Socimis have created portfolios worth around €4,000 million. These companies, headquartered in Spain, have been the major investors. Thus, 64% of the €2,727 million invested in offices was disbursed by Spanish investors. “The main Spanish investors are Socimis, but they also include investment funds, private equity firms, wealth managers and family offices. The average price for this type of transaction is €29 million, compared with the large deals carried out by British investors (above all investment banks and private investment companies), which exceed €100 million”, explain sources at the consultancy JLL.

Spanish investors have also exceeded foreigners in terms of the purchase of retail premises; 78% compared with 22%, respectively. “During 2014 and Q1 2015, Spanish investors spent €738 million on retail premises. The average price of these transactions was €37 million and the typical buyers were retail operators (such as fashion brands), family offices and private investors”, say JLL.

Meanwhile, international buyers dominate the market for shopping centres and hotels. Of the €3,092 million invested in shopping centres between January 2014 and March 2015, 82% was foreign capital, thanks to the purchases made by US funds such as Tiaa Henderson and specialist companies, such as the French firm Klépierre.

Almost €2,500 million has been invested in hotels in the last 15 months and 55% of the capital invested was foreign. Furthermore, it was very diversified, with Chinese investors such as the Wanda Group and Qatari funds, such as Katara Hospitality buying hotels in Spain – the latter acquired the InterContinental Hotel in Madrid. (…)

In the residential segment, several US funds have chosen to buy land in Spain. The clearest case is Lone Star, which has become the largest developer of land in the country. (…)

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Hotel Villa Magna In Madrid Up For Sale

16 January 2015 – idealista news

The Spanish hotel sector is on the radar of investors. The combined effects of the growth in tourism, falling price of oil and weakness of the euro bodes well for the performance of the sector; and sellers do not want to miss out on the opportunity. In the luxury segment, not only are the Ritz and Miguel Angel Hotels in Madrid up for sale, so too is the Villa Magna. Its owner, the Portuguese businessman Pedro Queiroz Pereira has expressed interest in selling the property, although the bids received so far have fallen below expectations.

Although no official sales mandate has been issued yet, the Portuguese firm Queiroz Pereira is open to offers for the purchase of Villa Magna, located in the Salamanca neighbourhood of Madrid. According to market sources, the selling price is close to €130 million, a price that no investor has been willing to pay so far.

Financial sources say that the price is inflated and that the hotel is not worth more than €90 million. Idealista.news contacted the owner of the property who declined to comment.

The Portuguese holding company, which also owns the Ritz Hotel in Lisbon, purchased the Villa Magna in 2001 from a Japanese family, the Shirayamas. Six years later, in 2007, it decided to undertake a “facelift” of the hotel, which was closed for 14 months whilst renovation work was completed. Sodim, a subsidiary of the Queiroz Pereira Group (and owner of Semapa, the main industrial group in Portugal) invested around €150 million on the hotel acquisition and remodelling work.

(……)

Hotel Villa Magna currently has 150 rooms of between 30m2 and 290m2, as well as various conference rooms, meeting rooms and a garden for outdoor receptions and dinners. It also has a wellness club with a sauna and Turkish bath.

Hotels, an investor target

In 2014, investment in hotels amounted to €1,081 million, up 37% on the previous year, to reach levels similar to those recorded before the crisis. The following transactions were amongst those that took place in the 5 star segment: the Hotel Renaissance in Barcelona was sold by Marriott International to the Qatar Armed Forces for €78 million; the Hotel Intercontinental in Madrid was sold to the Katara Hospitality Fund for around €60 million; and the Hotel Meliá La Quinta in Marbella was also sold.

Last year was also significant because more transactions were recorded in the holiday hotel sector than in the urban sector. Transactions included the acquisition of the Guadalmina Hotel in Marbella (4 star) and the Meliá Jardines hotel in Teide, Tenerife (also 4 star) by Socimi Hispania.

The arrival of the Four Seasons chain, a boost for the sector

The arrival in Spain of the luxury hotel chain Four Seasons has increased the level of interest in the renovation of historic properties, such as the Miguel Angel and Ritz Hotels in Madrid, which are currently up for sale. This foreign chain expects to open its first property in the Plaza de Canalejas, Madrid in 2017. It will be the first Four Seasons hotel in Spain.

Original story: idealista.com (by @pmartinez-almeida and tânia ferreira)

Translation: Carmel Drake

Hotel Investment Exceeds €1,000m In 2014

16 January 2015 – Expansión

Record year for hotel investment in Spain.

In 2014, 50 hotels including 8,861 rooms were bought and sold, an increase of 80% or €838 million on the previous year. Furthermore, €243 million was spent on the acquisition of 10 buildings in Madrid and Barcelona with the aim of converting them into hotels, mostly five star accommodation. Overall, total hotel investment rose by 37%, to €1,080 million, which represents not only a return to pre-crisis levels, but also the third greatest year-on-year increase of the last two decades, according to an in-depth market study conducted by the consultancy firm, Irea.

The holiday segment accounted for 59% of all transactions (€491 million), with a focus on three and four star hotels, which together represented 62% of the total volume. “The five star category, which has traditionally formed the core segment, declined in importance”, said Miguel Vázquez yesterday, the partner at Irea responsible for the hotel sector. In this respect, 2014 was a year in which single asset sales played a small role, with the exception of the sale of the Intercontinental Hotel in Madrid to the Qatari firm, Katara Hospitality.

The Balearic Islands, Madrid and Barcelona were the preferred regions for investors, who mainly acquired individual assets. Similarly, there was a significant increase in distressed transactions, as a result of financial problems for sellers, which accounted for 32% of all deals.

2014 was also an important year for transactions involving portfolios of hotel debt. Debt amounting to €1,003 million relating to 93 hotels was transferred in transactions with Octopus, Meridia and Amazona. Irea predicts that these types of operations will continue in 2015 and that the hotel investment figures may exceed those recorded in 2014.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake