Blackstone Offers €90M+ for Lar España’s Logistics Portfolio

14 June 2018 – Eje Prime

Blackstone is expanding its appetite for Spanish real estate. The US fund, which is in the middle of a takeover bid for Hispania’s hotels, is now attacking the industrial real estate market and is finalising the purchase of Lar’s logistics portfolio. The firm could pay more than €90 million for the six assets owned by the listed Socimi.

Lar’s portfolio, which includes one plot of land, a precious commodity in the sector’s current climate, is worth €92 million, according to the most recent appraisal, performed at the end of 2017. The capital appreciation that the Socimi has managed to generate amounts to 40%, according to Expansión.

The operation, in which Blackstone has emerged as the only finalist and which, therefore, is holding exclusive negotiations with the Spanish group, forms part of Lar España’s new strategic plan to divest its position in the logistics market. It is the intention of both parties to sign the sale and purchase contract before the summer.

Lar’s six assets span a combined gross leasable area (GLA) of 169,800 m2 and, since they came onto the market, have attracted interest from large investment funds and international logistics operators. The list of potential suitors has included, in addition to Blackstone, CBRE Global Investors, P3 and Ares Management.

Through this purchase, the US fund is seeking to strengthen its logistics portfolio in Spain. In January, the company paid €90 million for four complexes leased to the supermarket chain Dia. In 2017, the sector set a new historical record with total investment in Spain of €1.5 billion, up by 85% compared to the previous year, according to data from the consultancy firm Savills Aguirre Newman.

Original story: Eje Prime 

Translation: Carmel Drake

Irea: What Led to Last Year’s Record Inv’t in Spain’s Hotel Sector?

12 January 2018 – Hosteltur

Last year saw investment in the Spanish hotel sector break all records, with investors spending €3.907 billion on transactions involving existing hotels, properties for conversion into hotels and land for the construction of hotels. That figure represents an increase of almost 80% with respect to 2016, according to Miguel Vázquez, Managing Partner of the Hotels Division at Irea; and was the result of the sale of 182 establishments comprising 28,813 rooms, with an average price per room of €119,000, compared with an average price per room of €92,000 in 2016 and of €85,000 in 2015, which represents an increase of 40% in just two years (…).

According to the Irea Director, this investment boom was driven “not only by the greater number of operations but also by the fact that the prices of the assets sold were higher as they were coming onto the market after being repositioned in recent years. The types of investors have also changed, as have their demands in terms of returns: around 5-6% in the urban segment and around 6-7% in the holiday segment, given that we are no longer seeing as many opportunistic funds entering the market (…)”.

In fact, he has quantified that “more than 2,000 holiday hotels still need to be renovated and repositioned. There is a wide range of opportunities that the funds are focusing on, in search of agreements with small chains at times of generational changes and when they are interested in selling…or not, because the strong buyer pressure is continuing to motivate owners who are not typically sellers to put their assets on the market, especially independent operators. And that is leading to the entry into the market of large holiday hotel portfolios, which is what investors are backing Spain for, as well as independent hotels”.

Forecasts for 2018

And after “the stratospheric data of 2017”, in the words of Vázquez, “the inertia with respect to 2018 is very positive, the year is starting off very well”, although he thinks that hotel investment will moderate and “the effect of the uncertainty in Cataluña will make it very difficult for us to see a repeat of last year’s figures”.

Nevertheless, he cites three operations that should be resolved during the first few months of this year: the completion of the purchase of the Alua portfolio by Hispania (…); the sale of a portion of the Ayre hotel portfolio, which is currently on the market; and the launch of a hotel Socimi by a financial entity with 15 establishments, which could take place soon.

Vázquez estimates that the investments already committed for the first few months of the year identified by Irea amount to €4 billion, comprising mainly new build projects, taking advantage of the increase recorded in the purchase of land for the construction of hotels, with operations in Bilbao, San Sebastián, the south of Tenerife, Barcelona and Sevilla.

In terms of the strengths in the market, besides the repositioning of hotels that is leading to an improvement in competitiveness and the appeal of Spain as a destination, the Director highlighted “the magnet effect of qualified investors such as Blackstone, which are reinforcing Spain as a destination for hotel investment” (…).

Weaknesses: overheating

Vázquez highlighted the overheating of prices that is happening in destinations such as the Canary Islands, where the average (sales) price per room has increased to €152,000, compared to the national average of €119,000, although, it should also be taken into account that “the operation that carried the most weight in terms of those figures was Sabadell’s sale of HI Partners to Blackstone (…), involving high quality, repositioned hotels, which increased prices”.

In fact, the most expensive prices were recorded in Barcelona and Madrid, which holds the record for the sale of the most expensive room with Operación Canalejas, for approximately €1.4 million, whereby exceeding the figure of €1.2 million recorded during the sale of Hotel Villa Magna (…).

In the Balearic Islands, as the director acknowledges, “there is still more margin because there are a lot of hotels there that still need repositioning and, although there is price inflation, it is not as marked as in the Canary Islands, which benefit from having year-round demand and five years of high occupancy rates, which drives up prices”.

Original story: Hosteltur

Translation: Carmel Drake

Savills: RE Inv’t In The Retail Sector Totalled €2,400M In 2015

14 March 2016 – Cinco Días

Real estate investors really like the retail sector in Spain. In fact, last year, they demonstrated their interest through the purchase of shopping centres, hypermarkets, supermarkets and other retail outlets. In 2015, total investment in the sector amounted to €2,400 million, to reach a new peak in the historical series prepared by the consultancy firm Savills, which dates back to the year 2000.

This data is better than any recorded during the real estate boom years of the last decade. The figure represents an increase of 14% with respect to 2014 and of 10% with respect to the market peak to date, recorded in 2006.

In terms of the number of operations in this segment, the increase of 35% with respect to last year, with 46 investment operations, also marked a new record with respect to the level reached in 2014, when 35 operations were signed.

Moreover, sources at Savills say that the pace of activity does not seem to have slowed down so far in 2016 – the number of transactions to date is in line with the number recorded during the first quarter last year. Almost €600 million has been invested so far this year, which represents a level similar to the annual volume recorded during the years of the crisis, between the period from 2009 to 2013.

The consultancy firm calculates that the current portfolio of operations in the pipeline (pending signing) and assets that are going to come onto the market in the short term could amount to an additional €2,500 million.

On the investor side, Socimis have become key players, with new players such as Lar España, which has attracted hundreds of millions in foreign funding.

In any case, cross-border investment by European and US funds accounted for more than two thirds of the total in 2015 and almost all of the investment made so far this year. On the sell side, international firms also account for most of the activity. “Players who purchased at the low point in the cycle and those that are now looking to rotate their assets are taking advantage of the recovery to generate more profits”, say the sources.

The largest transaction last year involved the sale of the Puerto Venecia shopping centre in Zaragoza, which Intu acquired from the fund Orion Capital for €451 million. That was followed by the sale of the Plenilunio shopping centre, which Klépierre bought from the same fund for €375 million. In third place was the sale of a portfolio of Eroski supermarkets to Invesco for €358 million.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake