Blackstone’s Spanish Hotel Portfolio is Worth €3.5bn

3 June 2019 – La Vanguardia

In recent years, the US fund Blackstone has invested €3.5 billion in the Spanish hotel sector through its specialist manager HI Partners, making it the largest hotel owner in Spain and the third largest in Europe after the Swedish firm Pandox and the French group Covivio.

HI Partners was created four years ago and owned 17 establishments by the time Blackstone acquired it in 2017 for €640 million. A year later, the US fund launched a successful takeover bid for the Socimi Hispania, which gave it control of another 45 hotels.

According to Alejandro Hernández-Puértolas, Partner and CEO of HI Partners, the firm now owns 62 establishments in Spain, with around 18,000 rooms. By region, 53% of its rooms are located in the Canary Islands, where it has 25 establishments, 26% are in the Balearic Islands (18 hotels) and the remaining 21% are located across the Peninsula above all in the Costa del Sol, Valencia and Cataluña.

HI Partners is headquartered in Barcelona and has offices in the Canary and Balearic Islands. It employs 100 professionals and its hotels are managed by 19 different operators including Marriott, Barceló, Hilton, Melià and Ritz Carlton.

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

Hispania To Invest €650M Ahead Of Company Sale In 2020

3 May 2017 – Expansión

Hispania is getting ready to embark on a new phase. The Socimi in which George Soros owns a stake wants to update its hotel portfolio, by purchasing new assets and reposition its existing properties, with the aim of preparing the company for sale, which must happen before March 2020 – the date on which the company will celebrate its sixth anniversary of trading on the stock market.

The company plans to invest €400 million in new hotel acquisitions, which it will undertake, for the most part, before September, including an establishment in Mallorca with 250 rooms that is expected to be completed soon and which will turn it into the largest hotel owner in Spain and the third largest group in Europe behind Pandox and Foncière des Murs.

The group has 38 hotels and 11,000 rooms. The gross asset value (GAV) of its hotel portfolio amounts to €1,257 million, according to the most recent valuation performed by CBRE.

Similarly, the company will spend €250 million on the repositioning and renovation of its portfolio. This investment effort will be undertaken primarily in 2018. The group will finance this investment using its own capital and through debt.

In this way, the managers seek to have Hispania ready by the first quarter of 2019 to prepare it for its sale. The Socimi is considering selling off the whole company – excluding its offices and homes – through a transfer of control, rather than by selling off the assets individually or in batches.

The entry of Soros into the group’s most senior management body, following the incorporation of Benjamin D. Barnett, analyst at Soros Fund Management UK Management LLP, into the Board, will facilitate contact with international investors interested in the company, according to sources in the market.

In addition to its hotel portfolio, the Socimi managed by Azora also owns 27 office buildings, worth €520 million and measuring more than 185,000 m2, as well as a portfolio of homes comprising 750 units worth €230 million.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Will Accelerate Its Hotel Investments In 2017

25 January 2017 – Expansión

New strategic plan / The Socimi managed by Azora is planning to sign operations amounting to almost €200 million over the next few months and is also considering selling off its residential portfolio and rotating its offices.

Hispania is clear about its commitment to the hotel sector and is going to put its foot down on the accelerator in 2017, with operations worth almost €200 million due to be completed soon and more, worth over €1,400 million, currently being analysed. The real estate firm, managed by Azora and in which George Soros holds a stake, will present its new strategy to its shareholders at the end of February. The strategy includes: increasing the rate of growth in hotels, divesting from the residential segment and rotating its office assets. (…).

Hispania currently owns 37 hotel assets, containing more than 10,500 rooms, worth more than €1,000 million, making it the second largest hotel owner in Spain, behind only Meliá, and one of the main investors specialising in hotels in Europe, alongside Fonciére and Pandox.

The Socimi’s portfolio also contains 750 homes in Madrid and Barcelona, worth €215 million, and 25 office buildings, with a combined leasable surface area of 153,000 m2, worth almost €450 million. The firm’s plans include selling off its residential assets in a block sale to maximise gains and rotating its office portfolio.

In the residential segment, the company acquired the Torre Isla del Cielo in Barcelona, containing 213 homes for more than €60 million in May 2014; and it also owns 286 homes in Sanchinarro (Madrid). 75 of the homes in the Sanchinarro complex have been renovated Hispania bought them, whilst 64 of the homes in Isla del Cifra have been refurbished. This repositioning strategy has allowed the company to lease the renovated homes for 31% more in the case of Sanchinarro and 74% more in the case of Isla del Cielo. Hispania also owns homes in San Sebastián de los Reyes and Majadahonda, as well as a complex on Avenidad de Hispanidad, in the north west of Madrid.

In terms of offices, Hispania’s portfolio includes the Torre 30 building, leased to Ilunsion, and the Aurelio Menéndez building, leased to Uría Menéndez.

In parallel, the company is working with ratings agencies with a view to securing an investment grade rating, according to market sources. Hispania’s average cost of debt currently stands at 2.7% and depending on the results of the strategic review, the company may analyse a bond issue with the objective of diversifying its financial structure.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake