Tag: Project Othello

13 April 2015 – El Confidencial

The hotels are located all over Spain – in Lloret de Mar, Jaén, Benidorm – but according to sources, some of them have been closed.

This is not a transaction involving debt with hotel collateral, but rather the sale of the assets themselves, of their flesh and bones, of their cement and brick. BBVA has hung a “For Sale” sign over fourteen hotels that have been sitting on its balance sheet since various non-performing loans were foreclosed, according to a number of sources. Aguirre Newman has received the sales mandate, but neither the consulting firm or the bank have wanted to make any declarations in this regard. The transaction has been dubbed Project Othello.

The hotels in question are located all over the Spanish peninsular – in Lloret de Mar, Jaén, Benidorm – but according to various sources, some of them are currently closed, with the consequent saving in terms of management and operating costs – the payment of salaries, for example.

BBVA’s decision to put these assets up for sale comes at a time when investors’ appetite for Spanish assets is growing rapidly, thanks to confidence in the growth of the Spanish economy, the record number of foreign visitors to our country, as well as legal certainty.

There is activity in the real estate market, and specifically, within the hotel segment. In 2014, transactions with a value of €1,080 million were closed, representing an increase of 37% over 2013, and twice the figure recorded in 2012, according to data from the consulting firm Irea. It represented the third highest investment volume in the last twenty years, only behind €1,095 million in 2007 and €1,780 million in 2006, an exceptional period for the sector.

Nevertheless, hotel experts consider that it is unlikely that BBVA will find a single buyer for all of these hotels; instead they think that the most likely option is that the entity will end up selling the assets individually to private investors.

BBVA’s is not the only hotel transaction currently on the market. In addition to the sale of these assets, other entities are also negotiating the sale of various debt portfolios that are secured by hotels as collateral. Such is the case of Bankia’s Project Amazona, worth €400 million, secured by around fifty hotels and Project Gaudí, a portfolio of real estate loans worth €750 million, held by the German “bad bank”, which at the time was used to buy the Hotel Arts in Barcelona. Likewise, the experts do not rule out the creation of hotel Socimis over the next few months, following in the footsteps of Hispania and Barceló.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake