Tag: London Regional

Idealista: Hotel Inv’t to Reach Record Figure of €3.2bn in 2017

26 December 2017 – Idealista

The year-end forecasts for hotel investment are marking record highs, exceeding the €3.2 billion threshold. This represents an increase of 45% with respect to 2016 and of 25% with respect to 2015, the record year to date when investment amounted to €2.55 billion. The large operations completed during the year include the 14 assets (HI Partners) that Sabadell sold to Blackstone for €630 million and the purchase of the iconic Edificio España building (pictured below) in Madrid by the hotel chain Riu for €380 million.

The hotel segment has risen to prominence in 2017 in terms of real estate investment, accounting for 30% of the total market share, exceeded only by retail. During the first six months of the year, €1.655 billion was invested in hotel purchases.

Madrid and Barcelona are the two cities that recorded the majority of the real estate operations: the Spanish capital accounted for 19% of total investment and the Catalan capital 12%. Nevertheless, markets such as Valencia, Sevilla and Bilbao also started to spark interest amongst investors. Meanwhile, in terms of holiday markets, the Canary Islands, Andalucía and the Balearic Islands led the investment ranking, accounting for 23%, 13% and 9%, of the total investment, respectively.

Between January and November 2017, 94 operations were closed, with 109 hotels changing hands. The most significant operation was completed by Blackstone, with its purchase of the HI Partners portfolio from Sabadell (…).

Another important deal was closed in June with the sale of a portfolio of 3- and 4-star Meliá Hotels, located in Ibiza, Lanzarote, the Balearic Islands and Torremolinos to London & Regional for €230 million.

In 2018, the investment figures in the hotel sector could soar once again if Barceló’s plan goes ahead to take over the NH Hotel Group, worth €2.48 billion. That deal would create a new market leader with more than 600 hotels and 109,000 rooms.

Original story: Idealista 

Translation: Carmel Drake

Deloitte: Hotel Inv’t Will Exceed €3,000M In 2017

7 November 2017 – Expansión

The extraordinary tourism data in Spain, the interest from investors in real estate assets and the purchase by international funds of hotel portfolios has catapulted investment in the Spanish hotel segment so far this year to €2,600 million. That figure is 21% higher than the total amount recorded in 2016, and is very close to the record figure of €2,700 million recorded in 2015, according to The Hotel Property Handbook report, prepared by Deloitte España.

In this way, the hotel sector now accounts for 35% of total real estate investment in the tertiary sector (non-residential assets) in Spain. The firm forecasts that, by the end of this year, the investment volume figure will have easily surpassed the €3,000 million threshold.

In terms of the main operations of the year, the purchase by the US fund Blackstone of the HI Partners hotel portfolio, comprising 14 establishments, from Sabadell for €630 million and the acquisition by the British fund London & Regional of four Starmel hotels – a joint company formed by Meliá and Starwood Capital in 2015 – for €230 million, have given the investment figure a real boost.

Record operations

These operations have been accompanied by several one-off hotel transactions, such as Edificio España, which was acquired by RIU in June for €272 million (…).

Other noteworthy operations so far this year include the purchase of Hotel Silken in Barcelona by the British fund Benson Elliot for €80 million and the acquisition of 55% of Hotel Diagonal Mar in Barcelona by Axa for €80 million.

For Javier García-Mateo, Partner at Deloitte Financial Advisory, institutional investors are seeing the opportunity to build large portfolios of holiday hotels in Spain, to integrate them into their international platforms in the Caribbean, South America and South-East Asia, developing a direct channel and obtaining greater negotiating power with tour operators. “In the end, Spain is establishing itself as the world’s main tourist market”, he says.

In this sense, we are seeing the natural migration of traditional hotel owners, who are divesting property to focus on management, such as in the case of the Meliá chain, which is making way for overseas investors who have greater financial muscle and so can launch more ambitious projects, explains Patricia Pana at Deloitte Financial Advisory.

In this context, the large tour operators are also participating in the investment fever and are buying assets in order to carry out a vertical integration of their business (…).

Interest from investors is partly driven by the record number of visitor arrivals – more than 84 million international tourists are forecast to visit Spain this year – and the strong evolution of key performance indicators such as the average daily rate (ADR), revenue per available room (RevPAR) and the occupancy rate.

Peak returns

Specifically, the ADR in Spain reached an average of €82.30 in 2016, up by 5% YoY; the occupancy rate rose by four percentage points to 66%; and RevPAR increased by 10% to €53.90.

The challenges for the sector now include improving the hotel portfolio to allow for an increase in prices. “If we compare our hotels with those in other urban and vacation destinations, the price per room of Spanish hotels still has a lot of potential, provided that renovation and transformation projects are carried out with the help of the main operators”, says Ana Granado, Director at Deloitte Financial Advisory (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Catella: RE Inv’t Rose By 60% During First 8 Months To €7,061M

25 September 2017 – Expansión

The Spanish real estate market is still a magnet for investment at the global level. In this way, during the 8 months to August, investment in tertiary real estate assets (in other words, non-residential properties) rose to €7,061 million. That volume is 62% higher than the figure registered during the same period in 2016, according to data from the consultancy firm Catella (…).

By type of properties, commercial assets accounted for 45% of the total investment, with a volume of more than €3,200 million, up by 52% compared to the first eight months of 2016. In fact, that figure already exceeds the amount recorded for last year as a whole and is very close to the record investment made in 2007, when commercial assets worth more than €3,590 million were sold, according to sources at the consultancy firm.

Of that amount, investment in shopping centres accounted for 60% of total retail investment, amounting to €1,929 million. The figure is explained by the completion of major operations, such as the purchase of Xanadú, in Arroyomolinos (Madrid), on which Intu Properties spent €530 million; and the operation involving Nueva Condomina, in Murcia, which Klépierre purchased for €233 million.

Interest

Large assets were not the only retail assets to spark interest: high-street premises were also on investors’ radars. As such, €711 million was spent on that type of property between January and August, with highlights including operations such as the purchase of Preciados 9, the future flagship Pull & Bear store in the centre of Madrid, by Generali for €98 million. Meanwhile, investors spent another €516 million on retail parks and supermarkets, with the operation involving a portfolio of nine retail parks leading the way – the South African investor Vukile spent €193 million on that purchase.

In the case of offices, investment increased by 46% to reach €1,512 million. “The Boston portfolio – comprising 14 office buildings located in Barcelona, Madrid and Valencia – owned by BBVA and acquired by Oaktree for €180 million has been the most important transaction so far this year. In Madrid, the most significant transaction saw the acquisition of the Manoteras business park by Tristan Capital (€103 million), whilst, in Barcelona, the most high-profile deal has been the purchase of Torre Agbar by Merlin Properties (€142 million”, say sources at Catella.

During the first 8 months of 2017, hotel purchases rose by 25% to reach €1,760 million, thanks to operations such as the one involving Edificio España, for €272 million, as well as the purchase starring the international fund London & Regional (which acquired four hotels located on the coast and islands for €240 million), as well as others involving Starwood and KKR.

Moreover, the logistics sector has not been left behind in terms of the increase in investment. Between January and August, that segment saw investment grow by 31% to reach €575 million. (…). In this area, the most significant operation has been the sale of GreenOak’s portfolio to P3 Logistics Park for €243 million.

Whilst retail assets were the star product by type of property, international funds continued to be the undisputed stars in terms of buyer profile.

Between January and August, funds accounted for 42% of the total volume invested; whilst real estate companies represented 28% of the total (…). Meanwhile, the Socimis, who were the most active investors in 2014 and 2015, have seen their share of the cake decrease to 11% so far this year.

“On the other hand, core investors have returned to the market, with the acquisition of prime properties located in Madrid and Barcelona. Insurance companies, family offices and other institutional investors have purchased assets such as offices and retail premises in Madrid, with yields of around 3%”, said Carlos López, Partner at Catella.

Year-end

“…We expect 2017 to be a record-breaking year, with an investment volume of around €10,000 million, compared to the figures of more than €8,500 million in tertiary investment in 2016”, says López (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Meliá & Starwood Sell 4 Hotels To London & Regional For €230M

10 July 2017 – Expansión

The Meliá Hotel Group is rotating its asset portfolio. Starmel, the joint venture that the Mallorca-based hotel chain controlled by the Escarrer family constituted with Starwood Capital in 2015, has sold four hotels to London & Regional in an operation worth €230 million, according to market sources.

The hotels in question are the Sol Príncipe de Málaga, Sol Lanzarote, Sol House Ibiza and Sol Palmanova in Mallorca. These establishments, which have been renovated recently, contain more than 2,000 rooms between them and will continue to be managed by Meliá following the operation.

This is not the first time that London & Regional and Meliá have crossed paths. In fact, the company owned by Ian Livingstone, one of the greatest real estate entrepreneurs in the United Kingdom, and the Mallorca-based hotel chain have been partners since 2013, when London & Regional purchased 50% of a hotel that Meliá was preparing in Ibiza. That operation opened the doors to the Spanish market for Livingstone.

Meanwhile, the alliance between Meliá and Starwood Capital dates back to 2015, when the hotel group sold seven establishments in the Balearic Islands, the Canary Islands and Andalucía, worth €176 million, to Starmel. The fund controls an 80% stake in the joint venture, whilst Meliá, which recorded profits of €35 million from that operation, owns the remaining 20%. The partners planned to allocate €30 million to the renovation and repositioning of those hotels, which Meliá will continue to manage for the next 15 years.

In parallel, Starmel is continuing to look for opportunities to acquire new assets, with the focus on holiday resorts in the Mediterranean area. Hotels have become one of the preferred assets for investors.

According to data from the consultancy firm CBRE, investment in hotels exceeded €2,000 million during the first half of this year, which represents an increase of 170% compared to the same period in 2016. During this period, operations involving one hundred establishments have been closed, affecting 14,000 rooms in the Spanish market. In this case, CBRE has advised Starmel in the operation. “The assets are located in key tourist areas. Together with those destinations, Madrid and Barcelona are continuing to attract international investors, which reinforces the strength of the Spanish hotel market as an investment destination for the international investment community”, said Miguel Casas, Director of CBRE Hotels España.

Forecasts

The share price of Meliá Hotels International fell by 0.62% on the stock market on Thursday (following the announcement) to €12.88. The hotel chain, which has a market capitalisation of €2,959 million, has seen its share price rise by 16.25% so far this year.

For the year as a whole, Bloomberg’s analysts forecast that Meliá’s revenues will rise by 6.75% to €1,927 million and the net profit will increase by 12.45% to €116.5 million, according to the experts.

Original story: Expansión

Translation: Carmel Drake

British Groups Invest Heavily In Spain’s RE Sector

9 May 2017 – Expansión

The Grosvenor group is embarking on its first residential project in Spain, developing luxury homes in Madrid. It is following in the footsteps of other compatriot companies such as Intu, Taylor Wimpey and Benson Elliot.

One of the latest real estate companies to show its commitment to Spain has a history that spans 340 years. The firm in question is Grosvenor, the centuries-old British firm, which closed its first investment in the Spanish residential sector about two months ago.

The project chosen by Grosvenor for its arrival in Spain is a luxury residential development on the Golden Mile of Madrid. To this end, Grosvenor, through its subsidiary Grosvenor Europe, completed the purchase of a plot of land measuring around 820 m2, located at number 53 on Calle Jorge Juan, for the development of six exclusive apartments and one penthouse with views over the Retiro Park. (…).

Grosvenor’s operation on Jorge Juan forms part of a joint venture signed by the Asian firm Amcorp in July 2016, whereby it undertook to invest €70 million during the first phase. “We hope to build a significant real estate portfolio in Spain during 2017”, said sources at the British group, which was founded in 1677 by Sir Thomas Grosvenor, and which is nowadays one of the largest landowners in the United Kingdom.

In light of this commitment to Spain, Grosvenor, which has four divisions through which it operates in Europe, Asia, America and the United Kingdom, has strengthened its office in Madrid, led by Fátima Sáez del Cano, by hiring Miguel Silmi, who formerly served in interim roles at firms such as Altamira, owned by Banco Santander. (…).

Investment

Grosvenor’s commitment to Spain is not a unique case amongst the large British groups. “Investors from the United Kingdom have always liked the Spanish real estate market and they have invested throughout the economic cycle. For example, Heron International, which is known today for the shopping centres that it built in Madrid, Barcelona and Valencia, used to hold a significant portfolio of office buildings in Madrid, in the 1990s”, said Javier García-Mateo, Partner in Financial Advisory at Deloitte. (…).

Meanwhile, Benson Elliot has been present since 2011. That fund has just closed the purchase of the Hotel Silken Diagonal, together with the joint venture between Walton Street and Highgate. Previously, BE had purchased two other assets in Barcelona, which it has now sold. “Another British firm, London Regional, has purchased hotels and offices in Spain and has also taken advantage of the cycle to sell them at a profit”, said Rafael Bou, Partner in Real Estate at PwC.

“Having invested more than €2,147 million since 2011, British funds are the second most significant international investor in the Spanish real estate market, after the United States (…)”, according to Savills. During the first quarter of 2017, British firms have already made real estate purchases amounting to €550 million, according to Deloitte.

One example of this commitment is the return of British Land to Spain, which last year purchased the Nueva Condomina shopping centre in Murcia, and the more than €120 million that has been invested by the UK & European Investment group in operations in Madrid, Barcelona and Marbella. (…).

In addition to real estate companies and investment funds, some of the large British insurance companies are also placing their focus on the Spanish real estate sector, such as the case of Prudential and Aviva, which just closed the purchase of the Tormes shopping centre in Salamanca.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake