UBS Negotiating Sale of Barcelona’s Torre Tarragona to Blackstone

5 August 2019

Blackstone is currently in negotiations to buy the Tarragona Tower from UBS for between 100 and 110 million euros. UBS Global Asset Management acquired the tower in 2015 for €72 million from Omega Capital, subsequently investing another €10-million in renovations. The expected sales price would result in a capital gain of roughly 25% for the Swiss bank. Both firms declined to comment.

The tower, located next to the Sants railway station in Barcelona in a highly sought-after area, opened in 1998. The asset has ​​18,150 m2 of surface area spread over 19 floors and 250 parking spaces. The main tenants include Pepsico, Acens (a subsidiary of Telefónica), Quercus and Gentec.

Original Story: Cinco Dias – Alfonso Simón Ruiz

Adaptation/Translation: Richard D. K. Turner

CBRE: Hotel Investment Set a New Record of €4.9bn in 2018

10 January 2019 – Expansión

The hotel segment broke a new record last year thanks to two key operations: the takeover of Hispania by the US fund Blackstone and the takeover of the chain NH by the Thai firm Minor.

The hotel segment made history again in 2018 with a record investment volume of €4.9 billion, which represented an increase of 33% with respect to the previous year, boosted by the US fund Blackstone’s takeover of the Socimi Hispania and the Thai firm Minor’s takeover of the Spanish chain NH.

According to data from the consultancy CBRE, last year, 240 hotel assets were transacted in Spain spanning 36,500 rooms in total, which represents growth of 17% and 30%, respectively. In other words, more and larger-volume operations were closed in 2018 than in 2017.

The hotel market whereby completed five extraordinary years, driven by the excellent evolution of tourism. Spain is a market leader in this activity, with 81.9 million international visitors in 2017 and 81.2 million last year (…).

The most active investors in 2018 were institutional players, which accounted for 66% of operations, followed by hotel groups (21%) and private equity and family offices (13%). In the ranking of operations, the purchase of Hispania stands out, which ended up in the hands of Blackstone after the fund acquired more than 90% of that company. The US giant purchased the Hungarian-born magnate George Soros’ 16.56% stake in Hispania in April and, subsequently, launched a takeover valuing the company at €1.992 billion. After successfully completing the takeover in September, Blackstone became the largest hotel owner in Spain, with a portfolio of 46 assets and more than 13,144 rooms.

After the purchase of Hispania, came the takeover of NH by Minor. Following that operation, the Thai group became the owner of a portfolio of 350 hotels in Europe and Latin America – 30% of which are in Spain.

Other significant operations also included the entry into the market of the Chinese group Gaw Capital, which acquired 50% of the Hospes Hotel Group, worth €125 million, teaming up with Omega Capital, the family office owned by Alicia Koplowitz, owner of the other 50% of the chain.

In terms of individual assets, the purchase of the luxury Villa Magna Hotel in Madrid stands out. The Turkish group Dogus sold it to the Mexican Socimi RLH, chaired by Allen Sanginés-Krause for €210 million.

Renovation

The National Director of CBRE Hotels España, Jorge Ruiz, explained that, as well as the vertiginous sale of hotel assets, the notable investments in asset renovations stood out once again.

“The Spanish hotel stock is better equipped today to face the challenges on the horizon, such as the recovery of competing destinations, the impact of a hard Brexit and a slowdown in the Spanish economy”, he said.

Ruiz explained that, unlike during the previous upward cycle, hoteliers have opted to invest in renovating their portfolios, which will allow them to increase their prices.

In terms of the type of assets, vacation hotels accounted for 64% of investments, following the trend established in 2017, due in large part to the purchase of Hispania, whose hotels are located primarily on the Spanish islands and along the coastline. Investment in urban assets went from 40% to 36%. In 2018, the main star asset were 4-star hotels, which accounted for 64% of operations, followed by 5-star hotels, with 21%.

Star destinations

By destination, the Canary Islands accounted for 35% of investment, followed by the Balearic Islands, with 20%. The third-ranked location was Madrid, with 12%, followed by Barcelona (8%) and Málaga (5%) (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Chinese Group Gaw Capital Joins Forces with Alicia Koplowitz to Target Hotel Sector

25 July 2018 – Expansión

The Chinese fund manager Gaw Capital Partners is making its debut in the Spanish hotel sector hand in hand with Omega Capital, the family office owned by Alicia Koplowitz. Specifically, the investment firm specialising in real estate assets has purchased 50% of the Hospes Hotel Group, worth €125 million, and has created a joint venture together with Omega Capital – with which it will share the ownership – for the development and expansion of the Spanish chain.

Before the entry of Gaw Capital Partners, the hotel chain was owned in equal parts by Fonsagrada – a company owned by the Koplowitz family -; the Areyhold group, owned by the Yera family; and Telescom, owned by the Hernández López family.

Hospes, founded in 2010, owns nine boutique hotels located in Alicante, Cáceres, Córdoba, Granada, Madrid, Mallorca, Salamanca, Sevilla and Valencia. The company’s establishments, which are all four- and five-star properties, are located in unique buildings that are rich with historical and architectural heritage.

According to the results for 2016 (the latest available in the Mercantile Registry), the chain generated an operating profit of €10.5 million, up by 18% compared to the previous year, and sales of €30 million.

Growth in Europe

The purchase of 50% of Hospes by the Chinese fund has been carried out through the fund European Hospitality Fund I, managed by GCP Hospitality, its hotel division.

GCP Hospitality, founded by the shareholders of Gaw Capital Partners and by Christophe Vielle in 2008, currently manages 39 assets (hotels, apartments and university campuses) and 7,450 rooms around the world.

GCP Hospitality, led by Vielle, has regional offices in Bangkok (Thailand), Beijing (China), Hong Kong (China), Perth (Australia), San Francisco (USA), Singapore and Rangoon (Myanmar).

Vielle, CEO of GCP Hospitality Management, explains to Expansión that, with the good outlook for the European tourism industry, the company is “actively” studying ways of expanding its portfolio across the Old Continent.

“We will take advantage of the reputation of the Hospes Hotel Group and our international network to raise the profile of the brand”, says the CEO GCP Hospitality Management.

In this sense, the evolution of the Spanish tourism sector in recent years has been spectacular. Spain recorded a new milestone last year with the arrival of 82 million international tourists and has also registered eight consecutive years of growth in terms of tourism GDP. For Vielle, the acquisition of Hospes Hotel Group is an example of the “solid track record” of GCP Hospitality in the launch and management of successful hotels and first-rate brands.

Since its creation in 2005, Gaw Capital Partners has raised almost USD 10 billion (€8.557 billion) and currently has USD 18 billion (€15.403 billion) in assets under management. The fund manager, which is investing in different segments of the real estate market, has a significant presence in the Asia Pacific region and in the USA.

Promoting the brand

Meanwhile, the alliance with the Chinese investment fund manager allows Omega Capital to boost its investments in the tourism sector.

Hospes is not the only firm that Koplowitz is backing in the hotel sector through her family office. Specifically, Omega Capital, together with the Orient Express group (now Belmond) purchased the Madrilenian Hotel Ritz for €125 million in 2003. More than a decade later, in 2015, Omega Capital and Belmond sold that iconic hotel to a consortium formed by the Olayan family, from Saudi Arabia, and the Mandarin group, which manages the establishment, for €132 million. The property is currently closed for refurbishment.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Alicia Koplowitz Considers Buying Barclays’ HQ In Spain

2 November 2016 – Expansión

Omega Capital, the investment vehicle owned by Alicia Koplowitz, is analysing strengthening its presence in the real estate market, taking advantage of the boom in the sector at the moment. It is considering submitting a bid for Barclays’ headquarters in Spain, located right in the heart of Madrid.

The office building in question is located at number 1, Plaza de Colón, opposite the Torres de Colón – the 116m-tall twin skyscrapers owned by Mutua Madrileña -. The property is worth between €40 million and €60 million, according to market sources.

The building has a surface area of around 3,900 m2 spread over three floors – ground, first and second -, and a terrace with spectacular views over the central Madrileñian square.

The property was taken over by Barclays when the British financial institution acquired Banco Valladolid in the 1980s.

More than two decades later, the banking entity has now decided to put the iconic building up for sale and has engaged the real estate consultancy CBRE to advise it during the process. Several investors have already expressed an interest in the property, in addition to the company owned by Alicia Koplowitz. Sources at the consultancy firm declined to comment about the sales process or the possible candidates for acquiring the property.

The British bank, which is considering remaining as a tenant of the building for a few months following the sale, until it finds a new location for its headquarters in Spain, is using this operation to take advantage of the investor appetite for well-located office buildings in Spain’s capital and whereby generate cash.

The lack of buildings in the prime area of Madrid has caused the appeal of them to increase given the supply shortage and the problems involved in carrying out new constructions in the city centre. One of the most high profile purchases in recent months involved Pontegadea’s purchase of Torre Foster.

The British entity indicated recently that it has detected considerable appetite for the property on Plaza Colón and it had received informal queries regarding its sale.

Barclays also said that it is considering the option of relocating its headquarters to a place that offers a better service “in terms of facilities, technology and comfort” for the entity, in a property that is aligned with the needs of its corporate and investment banking business.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Who Are The New Advisors In The RE Sector?

8 June 2015 – Expansión

The ‘big four’ audit firms and the investment banks are starting to advise on deals in the property sector, where specialist firms, such as Aguirre Newman, CBRE, JLL and Knight Frank, have been operating for more than 30 years.

Specialisation versus multi-disciplinary teams. The real estate investment boom in Spain is attracting both specialist consultancy firms and new players from the world of audit and banking. All of them are competing to advise on the major property transactions, both on the purchase and sale of companies, as well as of individual assets. This market saw investments reach €2,500 million during Q1 2015.

The large specialist consultancy firms arrived in Spain three decades ago. Having established themselves in the Anglo-Saxon markets, they were looking for other markets to advise companies and investors in their search for properties and land.

Such was the case of Jones Lang LaSalle (now JLL), Richard Ellis (now CBRE) and Knight Frank, which still lead the market for consultancy and transaction advice, together with a Spanish company: Aguirre Newman. The latter, created by Santiago Aguirre and Stephen Newman, is the only Spanish firm that competes with the multi-nationals to advise on large transactions.

Besides these four large firms, there are other international companies such as BNP Paribas Real Estate, previously known as Atisreal, Savills, Catella and the US firm Cushman & Wakefield.

(…)

Now, the RE teams from the large auditors – known as the big four – are entering the market. They have strengthened their teams in recent months, hiring staff from the real estate consultancies, and are taking advantage of the synergies they can offer with other departments (legal, tax, financing) to secure advisory contracts….Many international investors prefer this one-stop-shop model, especially when they are in a hurry to close a deal.

(…)

In this way, PwC has just advised on one of the largest transactions in the RE sector, the sale of the Ritz Hotel in Madrid (pictured above). PwC acted on the buy-side, advising Mandarin Oriental, whilst the vendors – Omega Capital (Alicia Koplowitz’s investment company) and Belmond (formerly Orient-Express) – worked with JLL. PwC has also advised on other recent transactions, such as the sale of the Plenilunio shopping centre to Klepierre.

Meanwhile, Deloitte Real Estate advised the US fund Tiaa Henderson on its purchase of the Islazul shopping centre in Madrid for €230 million, as well as on the sale of a batch of office buildings to the largest Socimi in the market, Merlin Properties. KPMG’s RE team is working with Credit Suisse to jointly advise Bankia on the sale of its Big Bang portfolio, the largest RE asset portfolio seen to date. It also advised Cerberus Capital and Orion Capital Management of their purchase of 97% of Sotogrande, amongst others.

The investment banks are also competing well with the consultancy firms and the big four, especially on the larger deals. They tend to receive buy-side or sell-side mandates for individual buildings and companies with asset portfolios.

In this way, N+1 is currently working with Popular on the sale of a RE portfolio, known as Project Elcano, worth €415 million. It is also working with Sareb on the disposal of part of the Polaris World portfolio.

Nevertheless, although there may be cases in which an investment bank works by itself on a RE transaction, the work performed by the large firms and the consultancies is usually complementary. The banks provide the financing and structuring advice; the RE consultancies value the assets.

(…)

Original story: Expansión (by G. Martínez, D. Badía and R. Ruiz)

Translation: Carmel Drake

Mandarin Oriental Enters The Bidding War To Buy The Ritz

12 February 2015 – Cinco Días

A new chapter has begun in the bidding war to buy the Ritz in Madrid, one of the most emblematic hotels in the capital. The property has been on the market for almost two years, but may have a new owner in a matter of days. Mandarin Oriental, one of the largest Asian luxury hotel chains, has set its sights on the hotel, which is currently controlled by Orient-Express and Omega Capital, the investment company owned by Alicia Koplowitz.

The owners of the Ritz have been looking for a buyer for the property for almost two years, which, despite its prime location and the power of its brand, has lost much of its appeal in recent years, due to a lack of investment. This has meant that all of the operators that have shown an interest in acquiring the property have identified the need to undertake a major refurbishment, which has played against a quick sale.

Despite that, Orient-Express, now known as Belmond, and Omega have remained steadfast in their price expectations, which led Marriott to placing an offer for €130 million on the table; the transaction fell through at the last minute, when it seemed like every blessing had been given. The problem was that, by adding the purchase cost to the amount required to reform the property, the buyer considered that the final result was infeasible.

Fairmont took over the reins in the bidding process during the second half of last year, by offering €120 million for the property, whose refurbishment it valued at around €60 million. The luxury hotel chain analysed all kinds of options to try to close the transaction successfully, ranging from reselling the rights of the Ritz brand to Marriott – which would have allowed its rival to use the brand throughout the Iberian Peninsular – to addressing the possibility of operating the asset under its second brand, Raffles.

But, according to several market sources close to the negotiations, Fairmont has now also withdrawn from the bidding, leaving the way open for Mandarin. The Asian player may end up closing this complex transaction, mediated by JLL, through an agreement whereby it takes on a management role, but which, in any case, will allow the Asian chain to establish itself in Madrid, a market that it has been analysing with much interest for over a year.

After acquiring numbers 38 and 40 on the exclusive Paseo de Gracia in Barcelona, overlooking Casa Batlló, the Hong Kong firm opened its first property in Spain at the end of 2009. With this investment now well established, the Asian hotel chain has plans to grow in the country, both in Barcelona and, above all, in Madrid.

Luxury hotels arrive in Madrid

The emergence of Four Seasons in the capital, which has reached an agreement with OHL Desarrollos to open the luxury Canalejas complex, has been a catalyst for the Madrilenian hotel market. The large international chains have set their sights on the city and deals are expected to be signed for properties such as the Hotel Villa Magna, the Hotel Miguel Ángel and the old headquarters of Asturiana de Minas; without forgetting the Edificio España, which was acquired by the Chinese Group Dalian Wanda.

These deals will follow others agreed in the last few months, such as the opening of Barceló’s four star hotel in the Torre de Madrid, the conversion of the Hotel Asturias into a boutique hotel and the transformation of the historical Tio Pepe building into a 5 star hotel.

Omega Capital and Belmond acquired the Ritz twelve years ago for €125 million. The strong impact of the economic crisis on the hotel sector in the capital, with declining tourist numbers and low prices, in addition to the cost of the pending renovation of the emblematic hotel, has taken its toll on the brand, for which an impairment loss of €12 million was recorded in 2013, the last full period for which official results are available.

Original story: Cinco Días (by R. Ugalde)

Translation: Carmel Drake

Recession Hands Over a Bill to Hotel Ritz

12/11/2014 – Cinco Dias

The economic crisis and the decline in the number of visitors coming to Madrid over the past years have deeply undercut the value of one of the most iconic hotels in the capital city. El Ritz by Belmond is 50% owned by Omega Capital, an investment vehicle of businesswoman Alicia Koplowitz, and chain Belmond, until recently known as Orient-Express Hotels. In the last three years, the brand value dipped from €22.9 million down to €10.9 million.

Auditor’s report on the Hotel Ritz Madrid company 2013 balance by PwC reveals that the 2011 and 2012 reporting included a caveat that incomplete data was accessible to verify correctly the brand’s value, ‘albeit the 2014 study provided us with an independently conducted valuation (…) indicating a €9.84 million loss’.

Hotel Ritz Madrid, directly operating the Hotel Ritz, registered a net revenue of €1.98 million in 2013, compared to the €3.3 million loss from a year earlier. The proceeds were intended for reducing the red from the previous years, showing a hole €46.15 million deep as per December 31st 2013.

PwC assures that the firm neither inclines towards dissolution nor ‘mandatory capital reduction’, in spite of negative working capital posting €62.16 million at the end of 2013, not considering the payables with its shareholders, and a negative net equity of €3.5 million. However, the auditor warned about ‘uncertainty about further operating capacity of the company’. From January to April 2014, Hotel Ritz Madrid met the financial liability agreed upon with the creditor banks and its two stakeholders injected €6.9 million in cash, loans of a participative nature at a 3.05% annual interest rate. In 2013, another €7.5 million was put in, and in 2012 €6.2 million more. Omega Capital and Belmond hold loans and credits amounting to €38.4 million.

At the end of 2013, the company owed €61.8 million to the banks and the Hotel Ritz was a collateral at the giant NPL portfolio ‘Octopus’ sale by Hypothtekenbank Frankfurt AG earlier this year. Throughout 2012, the establishment was thoroughly refurbished with view to ‘improving revenues in the next years’.

Omega Capital and Belmond bought the Ritz in 2003 for €125 million. Currently up for sale, the establishment called attention of such big-name brands as Marriot and Fairmont.

 

Original article: Cinco Días (by L. Salces)

Translation: AURA REE

Reig, Koplowitz & Cutillas Dread the Future of Their Real Estate

30/04/2014 – El Confidencial

On May 5th, when Eurohypo finally seals the sale of its Spanish mortgage portfolio, María Reig (Reig Capital), Alicia Koplowitz (Omega Capital) and Carlos Cutillas (Inmobiliaria Chamartín) among others will get to know the new owner of their debt.

Since the branch of Commerzbank announced the sale of the €4.5 billion credit portfolio in January, many debtors started to suffer from insomnia. The threat that ApolloLone StarBlackstone or Cerberus could acquire the lot and through the debt execution snap all their most valuable assets is the doom´s day scenario for them.

Cutillas and his Inmobiliaria Chamartin are in the worst situation as Eurohypo´s Octopus Project contains €450 million in his loans.

Apart from Inmobiliaria Chamartin, the portfolio contains credits granted to such real estate giants as RealiaMartinsa-FadesaTesta and Metrovacesa, hotels like AC HotelesMeliáTrypHotusa and Kempinski and stores groups like HinesEroskiSonae and Rodamco.

Also, large private investors have a reason to fear. The most prominent in this case is Alicia Koplowitz who owes €100 million to Eurohypo through her manager Omega Capital. She used the financing given by the bank to buy the Rey Juan Carlos hotel and a building on the Castellana Street in Madrid and 50% of the Ritz hotels in Barcelona. Unfortunately for Koplowitz, the properties call great attention of investors exploring the Octopus Project assets.

In turn, businesswoman Maria Reig has got inside the portfolio a €120 million debt proceeding from acquisition of Mutua Madrileña with headquarters on the Almargo Street in Madrid.

 

Original article: El Confidencial (by Carlos Hernanz)

Translation: AURA REE