Tag: management contracts

Sareb Chooses Haya Real Estate to Manage €8.4-Billion Real Estate Portfolio

5 November 2019 – Sareb announced that it has opted to renew its management contract with Haya Real Estate. Haya had already been acting as a servicer for a portfolio of loans and real estate worth €8.4 billion (net book value as of 12/31/18). The new contract will last for 30 months.

The contract is part of Sareb’s new business strategy whose ultimate goal is to “preserve or improve the value of its assets.” DC Advisory advised Sareb on the deal.

Original Story: Cinco Dias – A. Simón

Adaptation/Translation: Richard D. K. Turner

CarVal Hires Pepper to Manage Portfolio of 10,000 Mortgages

28 October 2019 – CarVal Investors has hired the Pepper Group to manage the portfolio of 10,000 mortgage loans it acquired this year from Blackstone. The US firm sold the portfolio to CarVal in July for nearly one billion euros, in its first major divestment of the last five years.

Pepper will manage the mortgage portfolio starting next year, taking over from Blackstone itself. The Australian Pepper group offers financial services and currently manages more than €30 billion in loans. It has been operating in Spain since 2006.

Original Story: Vozpópuli – Alberto Ortín

Adaptation/Translation: Richard D. K. Turner

Sareb Close to Awarding €8-Billion Contract to Service Real Estate Portfolio

21 October 2019 – Sareb has chosen two finalists to vie for the management contract for €8 billion in loans and real estate: Haya Real Estate, controlled by Cerberus, and Servihabitat, by Lone Star. The bad bank expects to award the contract, which is the largest currently on the market, within the next few weeks. The existing contract, with Haya RE, is set is expire, which led Sareb to seek to reduce its costs.

Sareb opted in the spring of this year to place the contract on the market again, to lower its associated costs. Principally, the firm is looking to pay less in management fees, while paying more for successful sales and placements. Until now, the bad bank has been paying roughly €100 million per year in fees.

Four other groups had been vying for the contract: DoValue’s Altamira AM, Intrum’s Solvia, Finsolutia, and Hypoges. However, three other contracts, currently with Solvia, Altamira and Servihabitat, are set to expire in 2021.

At the same time as Sareb is looking to reduce its fees, the contract, known as the Project Esparta, includes the bad bank taking on more responsibility for the assets. The change has reduced the size of the portfolio in play from about €11 billion (at net book value) to roughly €8 billion now. The new servicer’s activities will be limited to selling or renting any properties, while Sareb will take on many of Haya RE’s previous duties.

Original Story: El Confidencial – Jorge Zuloaga & Ruth Ugalde

Photo: EFE / Emilio Naranjo

Adaptation/Translation: Richard D. K. Turner

Meliá, Barceló and NH Implement Asset Light Model

2 September 2019

The major hospitality groups Barceló, Meliá and NH are taking advantage of the fervour in the Spanish real estate market to sell off some of their real estate holdings to interested funds and socimis. Many of the firms are implementing an asset rotation policy, shedding capital-intensive investments and looking to switch to a policy of hotel management and leasing.

To this end, Meliá, Barceló and NH have sold hotels worth approximately 500 million euros over the last two years as a wave of new investors, many socimis, have entered the market. Meliá began its asset-light policy a decade ago, and it is looking to increase the percentage of its EBITDA from its current 32% to 50% by 2024. In 2019, it accounted for just 2%.

Barceló is following the same sort of strategy, selling a hotel in Marbella to Hispania for €19 million. In 2017, Barceló sold 24% of its hotel sector Socimi Bay for €172 million, holding into long-term leases on the hotels.

NH, now part of the Thai group Minor, sold the NH Collection Barbizon Palace in Amsterdam to the German asset manager Deka for €156 million earlier this year, while also maintaining a 20-year lease on the property. NH has assets valued at €2.1 billion, including 350 hotels, with 54,000 rooms. Of those, NH only owns 76. The rest are leased or managed by the hospitality group.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

B&B Sells Its Last Hotel in Spain to Miratres for €1.7 Million

13 August 2019

The French hospitality group, B&B, sold its last hotel in Spain to the Miratres family office for 1.7 million euros. The hotel in Oviedo was the firm’s last directly owned property.  Now, B&B is focusing its investment strategy on long-term guaranteed rental contracts.

In this manner, B&B is looking to double its market share in Spain and Portugal from 32 to 64 hotels by 2022. The firm expects to inaugurate fifteen new venues by the end of next year, ten in Spain and another five in Portugal.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

 

Blackstone Will Pay Azora €224 million Following Termination of Contract

10 August 2018

Follows its successful takeover bid for Hispania.

The North American fund, through its subsidiary Alzette Investment, will terminate its contract with Hispania’s current asset manager. According to the agreed terms, Azora will be indemnified in the amount of €224.4 million, corresponding mostly to “success fees.” Blackstone had already announced its intention to grant the management of the hotels to HI Partners, its hotel management company.

Following the success of the Blackstone Group’s takeover bid for Hispania through its subsidiary Alzette Investment, announced at the end of July, the company announced the termination of its management contract with the Azora through a notice to the National Securities Market Commission (CNMV). The early termination will result in an indemnity that will exceed 224 million euros.

Hispania communicated Alzette’s decision to terminate the management contract between the Company and Azora Capital, signed on February 21, 2014. The conditions are set in the ‘Termination Letter’, according to which the company entitled to the “collection of the following fees for early termination under the Management Contract: (a) €33,698,143, equivalent to the amount of the base fee that would have corresponded to keeping the Management Contract in force until the end of its contractual term, and (b) €190,832,528 corresponding to success fees (performance fees) calculated in accordance with the Management Contract in the event of a change of control of the Company.”

As reported by Hosteltur tourism news, Blackstone plans to maintain Hispania’s assets, while changing the manager. In June, the American fund stated in its takeover bid, which provided details regarding technical aspects as well as the company’s proposed strategy after assuming control of the socimi, that it planned to control the hotel assets through an unlisted company, entrusting the hotels’ management to a subsidiary, HI Partners, and that it would terminate the company’s contract with Azora, which it has been managing Hispania’s assets for the past years.

Also, Alzette and the management company have agreed that Azora will continue cooperating temporarily with the Company ” to ensure an orderly transition after the completion of the takeover bid”.

Alzette has undertaken to present the terms of the Termination Agreement to the Board of Directors of the Company for its submission to the General Shareholders’ Meeting, which must be held no later than September 30, 2018, and to vote at said General Meeting in favour of the approval of said termination agreement for subsequent subscription by the Company.

Original Story: Hosteltur

Translation: Richard Turner

Radisson Wants To Grow In Madrid & Barcelona

30 March 2017 – Expansión

Radisson Blu – the hotel chain belonging to the Carlson Rezidor group, which is itself controlled by the Chinese giant HNA – arrived in Spain in 2009, with the opening of the Radisson Blue Hotel Madrid Prado. Three years later, it opened a resort in Gran Canaria, and just a few months ago it inaugurated its newest hotel in the country, the Radisson Blu Resort & Spa, also in Gran Canaria.

Radisson Blu owns almost 300 hotels in 69 countries. Now, the company wants to strengthen its commitment to Spain and to this end, it is analysing Madrid and Barcelona with particular interest, as key destinations for the opening of new establishments under the Blu and Red brands. “Spain represents an opportunity. We perform most of our expansion through management contracts or franchises, which means that we are not interested in leases, however the properties must always be in good locations”, explained Richard Moore, Vice President for Western Europe, the UK and Ireland at Radisson Blu.

HNA Tourism Group completed the purchase of Carlson Hotels last year and so took over control of 51.3% of the Carlson Rezidor Hotel Group, which operates in Europe, the Middle East and Asia, where it competes with NH, in which HNA also holds a stake. (…).

Moore added that the chain has studied options on the Mediterranean coast but that, for the firm to open a hotel, it “has to fit with our brand. We are proud of the way we make our brands fit with the properties and of our relationships with the property owners”.

Specifically, in the case of its most recent hotel in the Canary Islands, the chain has reached an agreement with the Norwegian family group Wenaasgruppen, which owns 24 hotels. It is the second time that the company has worked with the Norwegian group, which also owns the other hotel that Radisson manages in Gran Canaria. (…).

Moore added “There are lots of reasons why we want to have a presence in Spain and, above all, in Gran Canaria”. He said that, in the last twelve months, the number of tourist arrivals in Gran Canaria has grown by 14% and the average revenue per room (RevPar) has risen by 18% – or 15% in the case of luxury hotels -. “25 airlines fly to 142 destinations from Gran Canaria in 25 countries. It is the second most popular destination after Tenerife”, he said.

Brexit

In terms of risks to the business, Moore does not think that Brexit will have a significant impact on tourism in the islands and less so on the hotels that the group manages, which are upscale establishments (five stars) with a very diversified client base. (…).

Original story: Expansión (by Rebecca Arroyo)

Translation: Carmel Drake