Blackstone Wants to Create a Hotel Leader with Hispania

5 April 2018 – Expansión

The investment fund Blackstone is considering a corporate operation involving the real estate group Hispania, as revealed by the online edition of Expansión yesterday. Financial market sources indicate that the fund is interested in the group’s real estate assets, rather than in Hispania’s company structure, and may make an offer shortly. Half an hour before the close of trading yesterday, Spain’s National Securities and Exchange Commission (CNMV) decided to suspend trading of the company’s shares when they had risen by 1.65% to €18.50 per share.

In the statement, the regulator indicated that trading would remain suspended “whilst the relevant information is communicated”. The Socimi’s asset portfolio amounted to €2.5 billion at the end of last year, of which €600 million corresponds to the 25 office buildings that it is looking to sell as part of its strategy to focus on the hotel management business. The transfer of that real estate portfolio is already on track and could materialise soon with its sale to the fund Tristan Capital. That portfolio would have to be excluded from the bid that Blackstone is considering, which would amount to around €1.7 billion, according to sources in the real estate sector.

Blackstone’s objective is to acquire Hispania’s hotel portfolio, the largest in Spain, taking advantage of the interest from its existing shareholders, including George Soros, to close their investments in Spain, which were initiated in 2014 and which are expected to be liquidated in 2020. To this end, the price set in the negotiations would have to come close to the valuation of the hotel portfolio, estimated at €1.638 billion as at December 2017, compared to its current market capitalisation of around €2.0 billion. The valuation of the portfolio reflects an important appreciation with respect to the purchase cost of the assets contained therein, in which Hispania invested just over €1.069 billion, and 42% more than the total allocated, including spending on renovations and updates to the properties.

At the end of last year, the Socimi reached an agreement with its until then partner in Bay, the hotel group Barceló, to acquire 100% of that subsidiary. According to the most recent accounts, Hispania’s hotels generated revenues of €129.67 million in 2017, up from €117.8 million recorded the previous year. Of that amount, €77.9 million was generated by properties in the Canary Islands, followed by €22.1 million contributed by hotels in the Balearic Islands and €8.7 million by hotels located in Madrid.

Blackstone is the international fund with the greatest exposure to the Spanish real estate sector, following several record-breaking operations. It owns assets worth €15 billion, including 51% of Popular’s real estate business, with a gross value of €30 billion, but acquired for €5 billion. Last year, it also purchased HI Partners, the hotel subsidiary of Sabadell.

Original story: Expansión (by R.Ruiz/R.Arroyo/M.Á.Patiño)

Translation: Carmel Drake

Real Club Valderrama’s Members Buy The Golf Course For €28M

31 October 2017 – Expansión

La Zagaleta group, headquartered in London and created by the Spaniard Enrique Pérez Flores, has reached an agreement with the members of the Real Club Valderrama to sell them the Valderrama company, owner of the famous Valderrama Golf Course, located in Sotogrande (Cádiz). The members of Real Club Valderrama will buy the golf course for €28 million, the same amount the current owners paid for the asset when they bought it. Valderrama’s members had initiated an arbitration process, but that will be suspended as a result of this agreement.

In January 2016, La Zagaleta group, owner of the urbanisation of the same name, located in Benahavía (Málaga), bought the Valderrama group for €40 million. A year and a half later, it got rid of the sports facilities, the clubhouse, several residential plots and the Valderrama Golf brands, following months of negotiations, where the club members initiated an arbitration process claiming their preferential acquisition right over the course had been forfeited.


“In March, Real Club Valderrama initiated an arbitration process against La Zagaleta, on the basis that we consider that we were cheated out of our preferential acquisition right by the operation that was closed in 2015. During the course of this process, we initiated a negotiation and the resultant agreement is that the members will pay the same amount that  La Zagaleta paid to the fund MGI”, explains Javier Reviriego, Director General of Real Club Valderrama talking to Expansión. In this way, for the majority stake (94%), the club’s members (around 450 people from 40 different nationalities) will pay €28 million. “The purchase of the shares in Valderrama SA has been made for €23 million, plus debt of €5 million”, he said.

The club will finance half the operation with contributions of €30,000 per member, whilst the rest will be covered by a mortgage loan and own funds from the sports entity, founded in 1985. “We will continue investing and doing everything possible to ensure that Valderrama has the best golf facilities in the world. I also think that being the owners of the golf course strengthens our position in the sector as a private club, a unique model in Europe”, he said.

Over the last 30 years, the club’s members have operated the facilities through a rental agreement: “Being the owners of the course was a historical revindication for the members. The framework contract and lease agreement that regulated the relationship of the club with the ownership of the facilities did not grant full independence to the club’s board of directors to make decisions or establish the club’s strategic direction. There are also financial motives; the club used to pay a high rent and it is more profitable for us to invest in the asset”.

Meanwhile, following the sale, La Zagaleta will focus on the development of the Valderrama 2 urbanisation. It will be constructed on a plot spanning 220 hectares of residential use located just a stone’s throw from the luxury urbanisation in Sotogrande. There, La Zagaleta plans to build a luxury urbanisation with around 200 homes, priced between €3 million and €5 million, as well as a new golf course and hotel.

The operation in Valderrama follows the sale of other golf courses linked to urban developments, such as the purchase of Sotogrande by Orion, says Pablo Callejo, Director of Alternative Assets at the consultancy firm CBRE.

Original story: Expansión (by Rocío Ruiz/Lucía Junco)

Translation: Carmel Drake

Lar España Raises Valuation Of Its Asset Portfolio By 20%

10 July 2017 – Expansión

After several years creating large asset portfolios, the Socimis are now immersed in the management of their portfolios. Lar España, the listed real estate investment company created by the real estate company Grupo Lar, was the first of the four largest Socimis to debut on the stock market, in March 2014, and it made its debut without any assets on its balance sheet. Three years later, the company now owns a portfolio worth €1,448.2 million, according to a statement released last week.

That figure is 20% higher than the price that Lar España paid for those assets, in other words, the Socimi has increased the value of its properties by €235 million through its management. “The increase reached at the end of this year is particularly significant – if we compare the figures with those seen at the end of June 2016, the values have risen by 9.3%”, said the company.

Type of assets

The €1,500 million in assets owned by Lar España include, above all, shopping centres, with 16 assets worth more than €1,000 million, up by 15.2% compared to their collective purchase price. In recent months, the Socimi in which the fund manager Pimco holds a stake has invested €255 million in the purchase of two shopping centres, Parque Abadía in Toledo and Gran Vía de Vigo, as well as in 22 other retail premises throughout Spain.

In the case of the office portfolio (the Socimi owns five office buildings), its value has increased by more than 27% to €178.6 million, whilst its logistics properties have appreciated in value by 31.6% to €83.3 million.

Nevertheless, the highest increases in value were recorded by the Socimi’s projects under construction: four in-progress developments are now worth €145.4 million, up by 40%. The most noteworthy of these is the Lagasca 99 development. In January 2015, Lar España decided to make an exception to its strategy of investing in rental assets by acquiring a residential plot in the neighbourhood of Salamanca in Madrid. To this end, it invested €100 million, together with Pimco, on the purchase of a plot of land with a buildability of 26,000 m2. More than half of the 55 homes on that site have already been sold.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

BBVA: RE Sector Has Positive Outlook In 2017

18 January 2017 – La Vanguardia

BBVA thinks that the outlook regarding the real estate sector is “positive” and that this trend will continue into 2017, according to its report “Real Estate Situation in Spain” and the activity of its ‘BBVA Valora’ users.

For the bank, the progress in 2017 will be “very heterogeneous” across all autonomous communities. Specifically, Madrid and Barcelona currently lead the searches on ‘BBVA Valora’, for both the customer and non-customer categories. They are followed by Valencia, Sevilla, Alicante and other provinces such as Málaga and Cádiz.

At ‘BBVA Valora’, users can find information about house prices. Upon entering the address of the property, the tool returns the purchase and rental price, as well as what would be a “well negotiated price” for the buyer.

In terms of surface area, users tend to be most interested in purchasing properties that measure between 80 m2 and 130 m2, which account for half of the searches registered in the app

Original story: La Vanguardia

Translation: Carmel Drake

Larrain & Loiola Gestión Buy Illunbe Leisure Complex For €17.1M

22 November 2016 – Noticias de Gipuzkoa

The exiting Illunbe leisure complex (in Donostia) will soon be demolished and a new shopping centre, called El Mirador de Illunbe, will be constructed in its place. The aim of the property developers Larrain SL (which forms part of the Moyua Group) and Loiola Gestión Inmobiliaria (owned by Altuna y Uria), to whom the Town Hall of Donostia has awarded the sale of the leisure complex for €17.1 million, is to create a modern “first rate” shopping centre, in a prime location in the city, with views overlooking the sea. To achieve this, the developers will invest a total of €80 million over the next two years (including the aforementioned purchase price of €17.1 million and another €5.5 million to improve access to the site, as required by the Town Hall), in addition to €30 million that the future tenants may invest. The new Illunbe centre is expected to open its doors in time for Christmas 2018.

Although the sale still needs to be formalised (the municipal Government plans to approve and sign the deal soon), the JV (UTE or Unión Temporal de Empresas) formed by Larrain and Loiola Gestión Inmobiliaria was the only group to present an offer and the municipal services team has given their bid the green light. For this reason, the developers have spent the last few weeks marketing the property and making contact with potential tenants; and they admit that the proposal has received significant interest.

The new retail and leisure space will comprise three buildings. Two will be completely new and will be located to the south of the bullring: one will house a 3,000 m2 supermarket and the other will be home to a four-star hotel, with around 75 rooms. The third building will be the star attraction and will be constructed on the land that currently houses the existing property, which will be completely demolished (only the two underground parking floors will be maintained, and another similar floor will be added). Above ground, there will be four new floors and 30,000 m2 of space dedicated to retail and leisure, with a glass façade overlooking Donostia and the sea. “Instead of turning its back on the city, the new centre will look it in the eye”, said Juan Merino from Idea Real Estate, the company that is marketing the new premises at Illunbe on behalf of the property developers Larrain and Loiola Gestión Inmobiliaria. (…).

Original story: Noticias de Gipuzkoa (by Arantzazu Zabaleta)

Translation: Carmel Drake

Bankinter Revives Fixed Rate Mortgage War

9 June 2016 – Expansión

A new battle has commenced in the war between the banks to grant fixed rate mortgages. One of the most active entities in the commercial supply of these products, Bankinter, is redoubling its efforts. Yesterday, the bank announced widespread cuts in interest rates on its 5-, 10-, 15- and 20-year mortgages. Bankinter, whose fixed rate mortgages were already amongst the most competitive in the market, has cut the interest rate on its ten-year home loans from 1.75% to 1.6%; on its fifteen-year home loans from 2% to 1.8%; and on its twenty-year home loans from 2.3% to 2.1%.

The zero interest rate environment in the Eurozone has led the banks to offer fixed rate mortgages, given that 12-month Euribor, which is the index to which most floating rate mortgages are linked, is trading at negative rates (-0.018%). In this context, it is more profitable for the banks to offer fixed rate mortgages, given the limited margin they are able obtain on their variable rate products.

The main advantage for customers is that they know the amount of interest they will have to pay on the day they take out the mortgage; that figure is fixed and will not vary for the duration of the mortgage term. In other words, clients are protected against possible interest rate rises, although they would not benefit from any further hypothetical decreases.

Bankinter’s fixed rate mortgage has an arrangement fee of 1%, with a minimum of €350. It also charges a penalty of 0.5% during the first five years of the life of the loan in the event of its total or partial repayment, and of 0.25% thereafter, as well as a commission of 0.75% to offset the interest rate risk, in the event that the early repayment generates a loss of capital for the entity.

If Bankinter’s fixed rate mortgages are taken out to purchase a primary residence, then the value of the loan may not exceed 80% of the purchase price or appraisal value (the lesser of the two amounts). If the product is requested for a secondary residence, then the limit is 60% of the lower of those two values.

In addition, in order to benefit from these interest rates, the bank requires its borrowers to receive their salary into their Bankinter account, as well as to take out life assurance and home insurance with the entity. The applicable interest rates are higher if these products are not contracted.

The reductions also apply to the fixed element of Bankinter’s 15- and 20-year mixed (fixed and floating) rate mortgages, which decrease to 2% and 2.3%, respectively.

Original story: Expansión (by A.R.)

Translation: Carmel Drake

Hispania Buys 80.5% Of Socimi Bay For €123M

20 October 2015 – Expansión

The real estate company Hispania and the hotel chain Barceló are pushing ahead with the launch of their Socimi Bay, dedicated exclusively to hotel assets. After signing a partnership agreement in April, Hispania closed the purchase of 80.5% of the company through its subsidiary, Hispania Real, for €123 million, yesterday. The remaining 19.5% is owned by Barceló. The consideration was paid entirely in cash, with an initial disbursement of €95 million paid in May as an advance.

Currently, Bay is the owner of 11 hotels – which are all operated by the Barceló Group through a rental contract – with 3,946 rooms in total, located in the Balearic Islands, Huelva, Almería and above all, the Canary Islands (three in Fuerteventura, one in Lanzarote and another one in Tenerife). Moreover, it is the owner of a shopping centre in Fuerteventura. These assets have a purchase price of €207 million and a current appraisal value of €229 million.

Having completed this first phase, the Socimi is going to incorporate five other hotels and one new shopping centre into its portfolio in a second phase, which is expects to complete before the end of 2015. These assets are valued at €227.5 million, which means that before the start of 2016, the Socimi Bay will have 16 hotels and two shopping centres worth €456.5 million.

In addition to its majority stake in Bay, the real estate company Hispania, in which George Soros and John Paulson hold stakes, also owns other assets worth more than €700 million, including several resort hotels with another 1,918 rooms. Hispania’s share price closed down 0.75% on the stock exchange yesterday at €12.52 per share. (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hispania Buys 2 Office Buildings From Deka For €54.5M

25 June 2015 – Hispania Press Release

Hispania, through its 100% subsidiary company Hispania Real SOCIMI, S.A.U., has acquired two office buildings in Madrid from Deka. (…)

The Foster Wheeler building is located on C/ Gabriel García Márquez, 2, in Las Rozas, to the Northwest of Madrid. It has a Gross Leasable Area (GLA) of 11,058 m2, spread over three floors and 544 parking spaces. The asset has an occupancy rate of 100%, since it houses the headquarters of Foster Wheeler under a lease agreement.

The 4B Cristalia building (pictured above) is located in the Cristalia business park to the Northeast of Madrid, and has a GLA of 10,928 m2, spread over seven floors, plus 202 parking spaces. (…)

The purchase price agreed for both buildings was €54.5 million, which was fully disbursed with Hispania’s own funds. JLL acted as advisor to Hispania in this transaction.

These two acquisitions perfectly fit with Hispania’s strategy for the office segment in consolidated areas of Madrid.

Both buildings are very well maintained and in optimal condition.

Original story: Hispania Press Release

Edited by: Carmel Drake