Tag: Melia

Colony Capital Puts Meliá Valencia Hotel Up for Sale

10 August 2018

The hotel investment market is still at a fever pitch, driven by healthy tourism receipts in Spain. Taking advantage of the moment and the current lack of supply, the Colony Capital fund has decided to sell one of the largest hotels in Valencia, elEconomista confirmed with several sources in the sector.

The Meliá Palacio de Congresos Hotel, formerly managed by Hilton, is on the market for approximately 50 million euros, in an operation that is being advised by Savills Aguirre Newman.

The property, located at 52 Avenida Cortes Valencianas, has more than 300 rooms, a gym, restaurants and parking. Also, the four-star hotel has 24,000 square meters in area, consisting of two buildings with a 29-floor tower, a 21-room Convention Centre and can accommodate up to 875 people. The sale has aroused the interest of many investors, including family offices, socimis and institutional investors, including Axa Real Estate.

According to the same sources, the hotel’s management will remain with Meliá, which has been operating the asset since 2010 through a ten-year, renewable contract.

Growth in Spain

Colony took the asset over earlier this year as part of a much larger operation in which it took control of asset manager Continental Property Investments (CPI), previously owned by the Lebanese investor Boutros El-Khouri.

CPI, which owns properties in the United Kingdom and France, landed in Spain at the height of the crisis, taking advantage of the opportunity to acquire several hotels. The company invested a total of around 250 million euros in two years. In addition to the Meliá Valencia, it also acquired the Husa Princesa and Husa Moncloa, in Madrid, and Florida and Miramar, in Barcelona. These last two were acquired in a partnership with Joan Gaspart, the owner of Husa.

Original Story: eleconomista.es – Alba Brualla

Translation: Richard Turner

Atom Socimi to Go Public With Assets of More than €500 Million

7 August 2018

The Atom socimi, founded by Bankinter, offers the bank’s private banking clients an alternative for investing in the hotel sector. 

Atom announced its IPO in January and now owns 23 hotels with more than 5,200 rooms, managed by chains such as Meliá and Marriott. 

The investment vehicle devised by Bankinter has a 7-year investment horizon, to be followed by disinvestment, though the bank is permitted to extend it

Bankinter will take its socimi public, a listed real estate investment company that has already acquired 23 4- and 5-star hotels spread over Spain. The hotels and their 5,200 rooms are managed by Meliá Hotels International and Marriott International, among others, and are valued at more than 500 million euros. At the end of 2017, the bank began offering its private banking customers the possibility of investing in the socimi, which was dubbed Atom Hotels and constituted on January 5, 2018. Atom was created to acquire a portfolio of hotels for long-term leasing, as Hosteltur tourism news reported late last year.

On February 2, the socimi finalised a capital increase through which it reached a total funding level of €247.8 million and, after that, began acquiring hotels after having analysed a significant number of possible market operations, investing almost all of its available capital. In July, it became known that Meliá had sold the Meliá Sevilla, Sol La Palma and Sol Jandía Mar hotels, in the provinces of Seville, Santa Cruz de Tenerife and Las Palmas, to Atom, while maintaining a contract to manage the properties.

Just a few weeks ago, the socimi signed a syndicated 5-year, 191-million-euro mortgage loan, through which it obtained the necessary financial resources to complete its planned investments and reach a total of 23 hotels in its portfolio.

The portfolio is “well diversified” by asset type, location and operator, with fixed rents of 78%, rental contracts with an average required compliance of 10 years and minimal needed investment as most of the hotels have already been renovated or are in the last stages of renovation, sources said.

The bank intends that the portfolio of hotels should offer the socimi’s shareholders an annual dividend of close to 5%. The socimi is expected to be listed on the MAB, Madrid’s Alternative Stock Market.

Atom’s main shareholders are Bankinter’s private banking clients, with a minimum investment of 200,000 euros and a maximum ceiling of 15% of their financial assets.

Other investors, including Bankinter, the socimi’s manager, GMA, and institutional investors, also have investments of at least €60 million.

The bank led by María Dolores Dancausa allocated roughly 18 million euros while GMA invested another €9 million, so both have sufficient minority stakes in socimi to be represented on its board of directors. Unlike other socimis, Bankinter’s investment vehicle has a disinvestment term of 7 years, although the bank reserves the possibility of extending it.

This is not the first socimi launched by the financial institution. In February 2017, Bankinter launched Ores together with Sonae Sierra, which invests in commercial assets such in Spain and Portugal. Socimis and investment funds have served to boost the sale of hotel portfolios, a report by the Hotel division of Colliers International stated. In the year to June, Spain saw the second largest amount of investments in the country’s history, 1.83 billion euros, down 13% from 2017. Socimis and investment funds played an important role in the feat.

Original Story: Hosteltur

Translation: Richard Turner

Meliá Finalises Sale & Leaseback of Palacio de Congresos Hotel in Valencia

20 July 2018 – Las Provincias

The tallest skyscraper in Valencia is on the verge of changing hands. The sale of Meliá’s Palacio de Congresos Hotel, located on Avenida de las Cortes Valencianas, number 52, is being finalised for €50 million, according to sources speaking to Las Provincias. The operation is expected to be signed in September and several investors have expressed their interest in acquiring the former Hilton Hotel.

The owner of the iconic property, the fund Colony Capital, took just two months to put it on the market after acquiring it in February when it purchased the fund Continental Property Investments (CPI), the former owner of the hotel. According to the same sources, the candidates to acquire the building now include Socimis, institutional investors and family offices, such as the Valencian Zriser group, the firm owned by Pablo Serratosa. Another interested player is AXA Real Estate, the company that acquired the Hilton Hotel Diagonal Mar in Barcelona last year.

Despite the change of owner, the management of the hotel will continue to be entrusted to Meliá, which signed an extendable 10-year operating contract in 2011. It is a strategic asset for the hotel group, given its location next to the Palacio de Congresos, which makes it the best-positioned accommodation on the market for business people and guests of events organised in the Valencian enclave.

A yield of 5%

According to sources familiar with the operation, the asking price for the hotel was €45 million, which was the “minimum to make an offer”. Nevertheless, the market was pricing it at around 10% more, approximately €50 million and some even think that it will be sold more than that. “Socimis and institutional investors look for yields of 5% per year”, they reveal.

In addition, the sale price per room will range between €165,000 and €175,000. In terms of the price per overnight stay, hotels of this kind with an occupancy rate of 80% typically range between €90 and €95 per room. The expectation is that the former Hilton will cost around €100 per night in five years time.

The former Hilton is a 5-star hotel that opened its doors to the public in May 2007. It stands 117 m tall and has 29 storeys, with 269 rooms, 33 suites and two presidential suites. Moreover, it has a convention room and 18 meeting rooms. The building was constructed between 2002 and 2006 at a cost of €110 million, double the price at which the owners want to sell it for now. It was in 2010 when the owner company, the firm Hotel Palacio de Congresos SL, sold the property to CPI to avoid its definitive closure after that company filed for voluntary creditor bankruptcy.

Original story: Las Provincias (by Elísabeth Rodríguez)

Translation: Carmel Drake

Meliá Sells 3 Hotels to Socimi Atom for €73.4M

13 July 2018 – Expansión

Meliá Hotels has announced an agreement with the Socimi Atom Hoteles, in which Bankinter holds a stake, for the sale of three hotels in Sevilla, Santa Cruz de Tenerife and Fuerteventura for €73.4 million.

The transaction, which will generate a net accounting profit of €6.6 million, includes the hotels Meliá Sevilla, Sol La Palma (Santa Cruz de Tenerife) and Sol Jandía Mar (Fuerteventura), respectively.

The establishments will continue to be operated by Meliá by means of variable rental contracts (25% of the total revenues) for periods of 5 years, with a maximum of 4 extensions at the discretion of Meliá and up to a maximum of 25 years.

The operation values each room at €66,000 and represents an EBITDA (result before depreciation and amortisation) multiple of 13.9 times.

As part of the agreement, Atom undertakes to invest €20.2 million in the three hotels, whereby allowing their “repositioning”. Thus, the price per room after the investment will amount to €83,000.

The hotel chain has said that this sale forms part of its “strategy to adapt the attributes of the brands of all of the establishments operated by the company”.

Original story: Expansión (by D. B.)

Translation: Carmel Drake

Meliá to Open 1 New Hotel Every 15 Days During 2018 and 2019

7 June 2018 – Expansión

Meliá is accelerating its growth trajectory and is seeking to continue exporting its brands overseas. The Mallorcan hotel chain is planning to open 50 new hotels around the globe over the next two years. “This means that, on average, and with the exception of force majeure or unexpected events, we will be opening a hotel somewhere in the world almost every two weeks”, said Gabriel Escarrer Jaume, Vice President and CEO of the group at the General Shareholders’ Meeting yesterday.

The company ended last year with 375 hotels and 96,239 rooms in 43 countries. Of the total, 68% of the group’s hotels are located in Europe, the Middle East and Africa (EMEA), 33% in America and 9% in Asia-Pacific.

In this sense, the President of Meliá, Gabriel Escarrer Juliá, highlighted that expansion will continue to be a fundamental “motor” for growth. Escarrer Juliá explained that of the new openings planned until 2019, 20% will be located in EMEA countries, another 20% in the Mediterranean, 27% in America and another 33% in Asia-Pacific.

“Our bet for Asia-Pacific is clear if we consider that since 2013, we have more than quadrupled the number of hotels there to 45, including those that are operational and being opened”, he said.

Escarrer highlighted the operating performance of the company, which last year generated a profit, excluding capital gains, of €128.7 million, up by 27.8%, which allowed it to distribute a dividend of €0.1682 per share, in other words, €38.6 million.

Currently, 31% of the group’s EBTIDA, around €90 million, stems from the management of hotels. “This model allows us to generate high returns with minimal capital requirements since we invest in the acquisition of high-value management contracts and not in real estate assets”.

The CEO of Meliá underlined the effort undertaken in terms of digitalisation and quantified the investment in this area at €100 million over the last three years. That has resulted in the greater role of the corporate website in the business. The director explained that revenues proceeding from melia.com amounted to €520 million in 2017, up by 21%.

The director said that the group’s strategy involves continuing to rotate assets and strengthen their alliances with their partners to grow and improve the hotel portfolio. In 2017, Meliá spent €244 million maintaining and renovating its hotel portfolio.

“We have initiated a new valuation of our portfolio of assets, the global results of which we will have during the third quarter. I trust that the outcome of that valuation exercise will be positive.

Escarrer also referred to the challenges facing the company, including the push from new competitors such as Airbnb and the political instability.

Risk factors

“We feel very comfortable and confident of being able to fulfil the objectives of our strategic plan, although we monitor the main risk factors in our industry very closely, such as the evolution of the so-called collaborative economies and of processes that generate uncertainty, such as Brexit and the complex political situations in countries such as Italy and Spain”.

In any case, he reiterated the forecasts for 2018, with an improvement in RevPAR (average revenue per available room) (…) and an increase in margins of between 100 and 150 basis points.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

HI Partners Acquires Remaining 50.1% of Hotel Abama in Tenerife

12 March 2018 – Expansión

HI Partners has been making its first acquisitions since being taken over by Blackstone Real Estate. Banco Sabadell’s former hotel holding company has taken ownership of 100% of Hotel Abama Golf & Spa de Tenerife after acquiring the 50.1% share capital that it did not yet control from the Polanco family.

The company led by Alejandro Hernández Puértolas already purchased 49.9% of the luxury Canarian tourist resort from Tropical Hoteles – a subsidiary of the Polanco’s investment group, Timón – a year ago, and has now become its sole owner.

Luxurious five-star resort

Ritz Carlton is going to continue managing the establishment, which has a luxury five-star rating and 461 rooms, of which 148 are villas. Located in the town of Guía de Isora, the resort was designed by Melvin Villarroel. It spans a surface area of 90,000 m2 and has a two-starred Michelin restaurant run by the chef Martín Berasategui.

HI Partners, which Blackstone acquired last year for €630 million, owns 16 hotels comprising 4,684 rooms, which are operated by chains such as Ritz-Carlton, AC by Marriot, Lopesan and Meliá.

Original story: Expansión (by S. Saborit)

Translation: Carmel Drake

CBRE: Hotel Inv’t Reached Record Figure of €3.75bn in 2017

29 December 2017 – Europa Press

Investment in the hotel sector in Spain grew by 83% in 2017 compared to the previous year, to reach a total transaction volume of €3.75 billion, according to data from the consultancy firm CBRE Hotels.

The cumulative figure represents a historical record in the Spanish market, exceeding the previous record set in 2015. The increase is primarily due to strong demand from investors to buy and capitalise hotel assets, whereby taking advantage of the economic and real estate recovery in Spain.

According to CBRE Hotels, 190 hotel assets were sold in Spain in 2017, up by 23% compared to 2016, which represented an increase of 25% in terms of the number of rooms sold (28,000). Moreover, a further 2,200 future rooms were also sold last year in buildings and projects still under construction.

The most sought-after hotel assets were 4-star establishments, accounting for 42% of all investments.

The Canary Islands and the Balearic Islands accounted for almost 40% of all investments

In terms of the main investment destinations in the hotel sector, the Canary Islands (21%) and the Balearic Islands (18%), together with Madrid (17%) led the ranking, followed by Barcelona and Málaga. The most significant changes compared to 2016 were seen in Barcelona and the two island regions, which went from accounting for 36% to 15% in the case of the former and from 24% (combined) to 39% in the case of the latter.

In terms of the type of properties, holiday hotels accounted for 60% of the total compared with 40% urban properties. On the other hand, buyers invested in individual assets in 60% of cases, rather than in portfolios (40%).

Regarding the type of buyers or investors that acquired the most hotel assets last year, including not only hotels but also tourist apartments, aparthotels and land and buildings destined for hotel use, institutional investors participated in 55% of operations, followed by private entities and family offices, with 22% of transactions, and other hotel chains, with 21%.

Main operations

The largest operation of the year involved HI Partners, the hotel platform that Banco Sabadell recently sold to Blackstone for more than €630 million. The change of owner of Edificio España also hit the headlines – it was acquired by Riu Hotels & Resorts for €272 million. And finally, the Wave portfolio, owned by Starwood Capital and Meliá, comprising 4 hotels in Lanzarote, Ibiza, Torremolinos and Mallorca, was sold in the middle of the year to London & Regional Properties, on advice from CBRE (…).

“The excellent performance of the main tourism markets and the excess liquidity in the capital market have led to a historic year with more than 150 transactions and where institutional players have been the protagonists once again”, explained the National Director of CBRE Hotels, Jorge Ruiz.

Moreover, he added that “the outlook is very positive and we expect to see more concentration in the market in 2018 and a renewed interest in the tourism industry in our country”.

Original story: Europa Press

Translation: Carmel Drake

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

Bankinter Prepares to Debut its Hotel Socimi in Q1 2018

26 December 2017 – El Confidencial

Bankinter has started to offer its private banking clients the option of acquiring a stake in a listed real estate investment company (Socimi) that owns a portfolio of 4- and 5-star hotels located across Spain, which it plans to debut on the stock market during the first quarter of 2018.

This Socimi will be created with a share capital of almost €200 million invested in a selection of hotels: 65% holiday establishments and the remainder urban, including several properties operated by high-profile chains such as Marriott and Meliá, according to reports made today by sources close to the project.

In recent weeks, Bankinter has been in charge of choosing the hotels, all of which are operating, in order to offer an annual dividend of approximately 5% to all of the shareholders of the Socimi, which will make its debut on the MAB, the stock market segment designed for SMEs.

The main shareholders will be Bankinter’s private banking clients, who have already pledged to contribute around €120 million to the project on 18 January. The minimum investment per client will be €200,000 and the maximum will be 15% of each individual’s financial wealth.

In addition, other investors, including Bankinter itself, the manager of the Socimi and institutional investors, will invest at least €60 million more.

The idea is that the bank led by María Dolores Dancausa will invest €18 million and the manager of the Socimi, GMA, €9 million, which would mean that both will hold a minority stake in the company, but one that is sufficient to entitle representation on the Board of Directors.

Unlike other Socimis, the investment vehicle designed by Bankinter has a divestment period of 7 years, although the bank reserves the right to extend its life.

This Socimi is not the first to be launched by the financial institution, given that in February, it placed Ores on the market, together with the company Sonae Sierra. Ores invests in commercial assets such as shops and large retail spaces in Spain and Portugal.

Original story: El Confidencial 

Translation: Carmel Drake

Valencian Gov’t Receives 13 Offers for Land Next to Terra Mítica

7 December 2017 – Eje Prime

The Valencian Government has already managed to generate investor interest in the plots of land next to the region’s theme park, Terra Mítica, in Benidorm. The public administration has received thirteen offers for eight of the nine plots that it has put up for auction with a sales value of €26.35 million.

For those plots, which together span a combined surface area of 2.79 million m2, the ‘Sociedad Proyectos Temáticos de la Comunidad Valenciana’ (SPTCV or Company for Theme Park Projects in the Community of Valencia) has received proposals from ten companies, according to a report from the regional government itself. More offers may still be received over the next few days, through other public registers or by registered post, according to Expansión.

The transfer of land will be carried out with the right of use already granted to several companies for the next few decades. Such is the case of the Villaitana (Meliá) and Asia Garden (Barceló) hotels, as well as the land that is currently occupied by the Terra Natura theme park.

Original story: Eje Prime

Translation: Carmel Drake