Barceló, NH & Meliá Have Sold Assets Worth €1,000M In 2 Yrs

7 January 2016 – Expansión

The large Spanish hotel chains, led by Barceló, NH and Meliá, are continuing to slim down their real estate portfolios and to opt for lease and management contracts – over the last two years, they have sold assets worth more than €1,000 million with a dual objective: to clean up their balance sheets and to finance the growth and modernisation of their properties.

Barceló leads the ranking, by volume, thanks to the creation of the Socimi Bay together with Hispania. The hotel chain transferred 16 hotels and two shopping centres to the new entity in 2015. Hispania holds a 76% stake in Bay, having invested €458 million in the company. In parallel, between 2014 and 2015, Barceló sold other assets in the USA, Latin America and Spain – including the Hotel Barceló Santiago to the Chinese company Chongqing Kandge – for €212 million.

The intention of the group controlled by the Barceló family was to reduce its real estate exposure, which had reached a historical peak. The effect of these divestments has been partly offset by the purchase of its competitor Occidental, also in 2015. Currently, Barceló owns 45% of the 118 hotels that it operates.

Meanwhile, NH signed the largest divestment operation seen in the last two years. In 2014, it transferred the Spanish business of Sotogrande to Cerberus and Orion for €225 million. The hotel chain still has projects in Italy, Mexico and the Dominican Republic, but they may be removed from its portfolio in the medium term, given that it has now placed its focus on hotel management.

Strategy

Both NH and Meliá, whose strategy at the beginning of the crisis involved signing the highest number of low value transactions, is now seeking out juicier, more selective deals. Thus, last year, Meliá joined forces with the fund Starwood Capital to create a company to which it transferred seven hotels worth €176 million. The chain owned by the Escarrer family, which holds a 20% stake in the new company, will manage the hotels for 15 years. Moreover, it also sold the Calas Mallorca complex, which has 875 rooms, for €23.6 million.

Unlike NH and Meliá, which have chosen to replicate the Anglo-saxon model and reduce their real estate risk, other chains such as Iberostar and RIU are continuing their commitment to own their properties and so their divestments are happening in dribs and drabs. In 2014, RIU sold the Hotel Waikiki in Gran Canaria for €24 million and it sold Hotel Olivina in Lanzarote to Mazabi, which Iberostar now manages under its Olé brand. Last year, Mazabi also acquired two Iberostar hotels (the Santa Eulalia and the Costa del Sol) for €60 million.

Meanwhile, Iberstar’s last known divestment was made in 2013, when it transferred a hotel in Mallorca through a finance leasing operation. When that contract terminates, it will recover the ownership of the property, which it is continuing to manage.

In 2016, the experts expect that NH and Meliá will continue to carry the baton, but that there will not be any major operations, since their deleveraging has now been reduced. NH’s debt decreased by 16% between 2010 and September 2015. Meanwhile, Meliá’s debt, which exceeded €1,000 million in 2011, had fallen to €840 million by September (2015).

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Marriott, Barceló & Posadas Bid For Caribbean Hotels of BBVA & Ortega

19/03/2014 – El Confidencial

BBVA and Amancio Ortega are lucky. The sale of the Occidental Hoteles invoked huge interest among industrial groups and private equity funds. Morgan Stanley that supervises the process picked the most interesting offers proposed by Barceló, Marriott and Posadas from Mexico. 

Also, the pre-selection involved offers by: Grupo Playa allied with Host Hotel Resort, KSL Capital hand in hand with Iberostar and Caribbean Property Group in joint venture with Perella. AM Resort, Apple Vacation´s branch, has been outbid.

The Occidental Hoteles chain´s holding is represented as follows: 60% held by Valanza, 23% by Partler 2006 and the remaining 17% by Gregorio de Diego (…).

Both investors acquired the hotel group in 2007 for €700 million. Due to the worldwide recession and damage caused by hurricanes on the Caribbean Islands forced them to close a number of hotels. This brought €200 million losses from 2008 throughout 2011. The owners injected €100 million in the business to help it overcome the debt.

The company, that shed the emblematic Miguel Ángel hotel in Madrid, had to redeem €270 million in liabilities. The loan was granted by BBVA, La Caixa, Banco Popular, Banco Sabadell, Novagalicia and HSBC, among others. (…). In 2013, the hotel chain had the debt refinanced and profits returned.

 

 

Original article: El Confidencial (Agustín Marco)

Translation: AURA REE

BBVA & Amancio Ortega to Close the Occidental Hoteles Sale

19/02/2014 – Cinco Dias

Months have passed since Amancio Ortega and BBVA jointly named Morgan Stanley to put the Occidental Hoteles up for sale. They pursue at shedding their holding in the chain chaired by Eduardo Fuentes for which they had paid €700 million.

BBVA holds 60% of the chain through Valanza, its capital risk firm, whereas Amancio Ortega owns 23% via real estate company Partler 2006. The rest of the holding lays in hands of the hotel´s ex-director, Gregorio de Diego and the family possessing also the Comsa group.

Both investors received a lot of offers for the holding in the Occidental Hoteles, from such hotel groups as AMResorts and Playa Hotels & Resorts, a company where Barceló holds 40%, according to Bloomberg.

The Occidental Hoteles has got 18 establishments on eight different continents, in total 6.700 rooms divided among the Caribbean, Central America and Europe. The company employs 4.300 people.

By December 2013, the chain has managed the Hotel Miguel Ángel in Madrid, owned by Nadhmi Auchi. The Occidental Hoteles achieved refinancing of its long-term debt in May 2013 and announced intention to renovate its hotels (…).

 

Original article: Cinco Días

Translation: AURA REE

The Millionaire Who Holds the Hotel Miguel Ángel

Nadhmi Auchi pulls strings from his office in London without haste. Otherwise, he would have already found a replacement for Occidental, the network that controls his only asset in Spain, Miguel Ángel Hotel in Madrid. (…).

The owner of one of the best situated hotels in the Spanish capital, on Paseo de la Castellana Street, has got two options: either assign the property management to a third party or directly take care of it, releasing in Spain a branch of his luxury hotel chain Le Royal, (…) present in Luxembourg, Marocco, Tunisia, Lebanon and Jordan.

According to Forbes, Auchi is the 670th the richest man in the world and his fortune is the 22nd in the United Kingdom. First, he will have to reposition the hotel, investing about 30 million Euros.

(…) “From the financial point of view, the most logical option is to hold the distribution and the 267 rooms, and give way to an international brand. However, this hotel, thanks to its location, could be an upmarket product with prices ranging from 350 up to 375 Euros and less rooms, reaching the level of Hotel Villa Magna or Four Seasons” defends Miguel Vázquez, the director of Hoteles of Irea consulting company.

(…) The input investment, key money, can oscilate between 2 and 5 millions.

(…) It might turn out to be dificult to sell a room for  750.000  to a million Euros, which would value the hotel at 200 to 267 millions, because investors are less prone to pay amounts similar to ones before the crisis.

Source: Expansión