Tag: rate

Hotel Financing: Sabadell’s Market Share Rises To 31%

26 January 2017 – Expansión

Sabadell was the only Spanish bank to have its own stand at Fitur. The entity’s decision to physically attend the tourism sector’s major annual meeting reflects its desire to consolidate its position as the key player in this business segment, which is so strategic for the Spanish economy.

Two years ago, the bank chaired by Josep Oliu decided to launch Sabadell Negocio Turístico, a specialist division that has allowed it to secure a market share of 31% and increase the volume of financing it has granted to the sector to €4,500 million.

Over the last two years, the granting of loans to tourism companies has grown by €1,500 million, according to José María Martín Rigueiro, Director General of this business unit.

According to the executive, 90% of this volume is used to finance hotel purchases and the remaining 10% corresponds to loans used for renovation projects and energy efficiency improvement plans in tourist establishments. Nevertheless, in terms of the number of transactions, the proportion is inverse, in other words, 90% of the loans (by number) are granted for renovations and 10% for acquisitions.

More than 13,500 clients

“We have positioned ourselves as a key player in the whole sector, given that we are the only bank to offer a specific value proposition for financing tourist services and products. Moreover, it is suitable for large hotel chains, as well as the smallest of rural hotels”, said Martín Rigueiro.

Thanks to its specialist agents, Banco Sabadell is growing its client portfolio by 7% per annum and is now collaborating with 13,500 companies, including hotel groups, campsites, travel agents and tour operators. Moreover, its net investment balance is increasing at an annual rate of more than 10% and the volume of client resources managed is growing by more than 25% each year. The objective for this year is to grow its client portfolio by 8% and to increase its credit investment by 10%.

“At Fitur, we were breathing an environment of maximum optimism; the hotel sector is expected to grow this year, in terms of both occupancy rates, as well as average room rates”, explained the Director of Sabadell Negocio Turístico.

The banker also attested to the strong interest from international funds keen to invest in hotel assets in Spain. Investors are managing returns of between 9% and 18%, said Martín Rigueiro. (…). The greatest interest is being seen in the vacation hotel segment, as well as in the urban segment, in major capital cities.

Financing for hotel purchases is being provided across the board: to investment funds, Spanish family offices, individual investors, as well as hotel chains. 90% of the sectors largest players are clients of Banco Sabadell, and the bank now also has a market share of 45% in the SME tourism segment.

According to Sabadell, the default rate of new loans granted to hotels since the crisis is very low, given that operations are no longer being leveraged on the basis of the value of the underlying real estate assets, but rather on the basis of the business plans and income statements of the establishments. (…).

In parallel to this specialist business unit, Sabadell also operates in the hotel sector through HI Partners, a hotel investment and management company.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Hotel Revenues Rise & Profitability Soars

16 August 2016 – Expansión

Meliá, Barceló and Grupo Palladium are registering occupancy rates of almost 90% in some of their star destinations and are also achieving double-digit growth rates in terms of tariffs.

The hotel chains are on a roll, with an improvement in sales, occupancy rates and prices this year, and they are getting ready to benefit from the good times that the tourist sector is enjoying to boost their profitability as well. In 2015, Spain broke its record once again in terms of the number of international tourists, with 68 million visits; and all indications show that this year the figure could reach 70 million. (…).

Specifically, Meliá, in line with the data disclosed in its results, forecasts an occupancy rate of almost 80% in Andalucía, where it also expects to see an 11% increase in prices. For the Levante region, the group expects an occupancy rate of 75% and a 10% increase in prices, whilst in Ibiza, it forecasts a 26% increase in occupancy rates and an almost 50% upturn in the average price – due to the repositioning of its hotels on the island. For the Canary Islands, the hotel chain owned by the Escarrer family estimates an occupancy rate of 80% and a price rise of 13%.

This archipelago is also proving fruitful for Barceló. The company expects to close the month of August with full occupancy and a historically high profitability. During the first few weeks of August, the occupancy rate on the islands averaged 90% and average room rates had increased by 12 points.

In the Balearic Islands, the occupancy rates for July and August are in line with last year, but average prices per room have risen by more than 11%. The group highlights its growth in Ibiza, where it will achieve an occupancy rate of 98% in the high season, with a tariff increase of 18%.

For the region of Andalucía, Barceló is maintaining a similar occupancy rate to 2015, with an increase in the price per room of 13%.

Meanwhile, Palladium is forecasting an average occupancy rate for its hotel stock of 88.3%, six percentage points higher than in 2015, with an increase of 10% in the average daily rate (ADR) and in revenues per available room (RevPAR).

Sources at RIU indicate that its business is performing “very well” this season, in line with last summer, when occupancy rates were very high in all of its hotels along the Spanish coast and on the islands. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Knight Frank: Demand For Offices Soared By 30% In 2015

11 January 2016 – Cinco Días

The city of Madrid exceeded the real estate sector’s expectations with respect to the leasing of office space in 2015, as the volume of office space rented by companies grew by almost 30%, representing the best figure since 2008. In Barcelona, on the basis of data as at Q3, the increase was even greater, at 91%.

The real estate market is recovering at the same time as companies are starting to forecast their own growth. Unlike in recent years, during which time many companies have been delaying the decision to move offices or lease more space – because many of them have been involved in processes to reduce their workforces – last year there was a recovery, showing confidence in the future.

In Madrid, office rental agreements were signed for a total surface area of 480,000 m2 in 2015, the highest figure since the start of the crisis in 2007. The data was published last week by the real estate consultancy Knight Frank, which compiles industry information. The most optimistic forecasts predicted that the year would close with a figure of around 420,000 m2. The actual volume represents an increase of 27% with respect to the previous year. In 2014, 358,000 m2 of office space was leased out.

The minimum in the historic series was recorded in 2012, when 261,000 m2 of office space was leased out, at the height of the storm over sovereign debt in the countries in Southern Europe and when doubts over the economy were at their peak. By contrast, the best year was recorded in 2007, when 828,000 m2 of office space was leased.

This shows the positive behaviour of the market in recent months, which, in turn, has resulted from the strong macroeconomic outlook. At the end of the year, BNP Paribas Real Estate forecast that the volume of office rental operations would increase by 100,000 m2 in 2015 and by a further 84,000 m2 in the case of Barcelona.

In the Catalan capital, where full year data for 2015 is still pending, the volume of office space leased almost doubled during the first three quarters. During the 9 months to September, operations relating to 297,000 m2 of office space were closed, an increase of 91% according to the data provided by the consultancy firm CBRE.

The second half of the year has performed even more strongly in terms of new demand in Madrid. During the six months to June, office space measuring 198,000 m2 was leased; and from June to December, that figure amounted to 282,000 m2, i.e. 42% higher.

The most sought-after areas in Madrid are located inside the M-30, where there is a shortage of high quality buildings. In the case of Barcelona, demand is highest on Avenida Diagonal, el Paseo Gracia, the 22@ district and Plaza Europa. (…).

Moreover, the lack of high quality space, combined with the greater volume of demand, drove rental prices up by 6% in the best buildings in Madrid in 2015, to reach €27/m2/month. Even so, that rental figure is still one of the lowest in the historic series, well below the figure of €45/m2/month that tenants paid in 2008.

The main operations

One of the most important office rental operations in the capital involved the agency WPP, which took over a 36,000 m2 building on Calle Ríos Rosas. Another highlight was KPMG’s expected move to the 20,000 m2 Torre de Cristal, owned by Mutua Madrileña. Meanwhile, the bank BNP Paribas leased offices measuring 19,100 m2 in a building owned by Torre Rioja. Also, the consultancy EY signed an agreement to move into Torre Titania, owned by El Corte Inglés.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake