Sabadell Engages Lazard To Evaluate Future Of HI Partners

29 August 2017 – Expansión

Banco Sabadell is studying the best solution for its hotel manager HI Partners. To this end, the financial entity has engaged the investment bank Lazard to analyse the private sale of its subsidiary or to search for a shareholder to acquire a majority stake in the company, according to market sources.

In this way, Sabadell is opening a window of opportunity to those who may be interested in taking full or majority control of its hotel management company, whilst it continues, in parallel with the IPO of the same entity.

These two options will allow Sabadell to make cash on the one hand and undo its positions, taking advantage of the current investor appetite in the real estate sector and, specifically, the interest in hotel assets, and secondly, to find a partner to take a majority stake and whereby deconsolidate the business from its balance sheet.

The operation, known in the market as a dual-track deal, allows the company to launch a sale and the search for interested parties in parallel to and at the same time as it undertakes the stock market debut process.

In this way, Lazard’s commission is independent of the contract that HI Partners signed to evaluate the feasibility of listing the company on the stock market.

Opportunities

Sources at the bank consulted by Expansión have indicated that this represents a “very preliminary sounding out” of the various deconsolidation and value-generating options. (…).

In this sense, the CEO of Sabadell, Jaime Guardiola, said during the presentation of the bank’s most recent results that the vocation of the financial entity is not to remain as managers over the long term: “we want to exit and we have a very good opportunity ahead of us”, he explained.

HI Partners is led by Alejandro Hernández-Puértolas (pictured above centre), CEO of the company, who, together with Sergio Carrascosa (pictured above left) and Santiago Fisas (pictured above right), two other former executives of Reig Capital, comprise the management team.

The group was created in 2015 following the transfer of around twenty hotels by Banco Sabadell. The financial entity had foreclosed those assets during the crisis following the non-payment of debts. Moreover, HI Partners is responsible for managing the bank’s hotel debt.

IPO

To control these assets, the hotel investment and management arm of Banco Sabadell created two companies: one to hold the best hotels in the chain, HI Partners Holdco Value, and another containing smaller hotels in secondary locations, HI Partners Holdco Gestión Activa, with the intention of improving their management to then sell them on.

For the time being, Sabadell is not ruling out any of the options and is continuing to analyse the debut of its hotel management and investment subsidiary on the stock market.

Before the summer, the bank engaged the investment banks Citi, JPMorgan and Credit Suisse to sound out the market and analyse the feasibility of listing its hotel management subsidiary on the stock market (…).

In the event that the bank decides to debut the company on the stock market, the operation will focus on the company that controls the most strategic assets: 14 high-end hotels located in the main tourist areas and which, as at 30 June, had a combined appraisal value of €689 million, with more than 3,700 rooms in the portfolio.

Original story: Expansión (by R. Arroyo and J. Orihuel)

Translation: Carmel Drake

Starwood Joins Forces With HI Partners To Invest €500M

14 March 2016 – Expansión

International investors are becoming increasingly interested in the Spanish hotel sector. The US investor group Starwood Capital has joined forces with HI Partners, the subsidiary of Banco Sabadell, to invest €500 million in the purchase of hotels in Spain, over the next three years.

According to market sources, Starwood and HI Partners will create a joint venture that will specialise in the acquisition of hotel assets located in the main tourist areas, such as the Costa del Sol, the Canary Islands, the Balearic Islands, the Costa Brava and the Costa Dorada. The aim is to acquire 3-star and 4-star hotels that have more than 200 rooms. The vendors may be individual investors, as well as hotel chains interested in divesting their real estate assets.

Starwood Capital Group will control 70% of the joint venture, which will be implemented through the creation of a limited company. The US group – which already teamed up with Meliá in Spain in 2015 – will contribute funds through its Starwood Global Opportunity Fund.

Local partners

HI Partners will control the remaining 30% of the shares and will also take care of the management of the company, under the leadership of its CEO, Alejandro Hernández-Puértolas. Banco Sabadell owns a 99% stake in HI Partners and the remaining stake belongs to Hernández-Puértolas and two other founding partners of the hotel management and investment company: Sergio Carrascosa and Santiago Fisas. The three have extensive experience in the hotel sector, as they used to be involved with Reig Capital – the company that owns the Mandarin hotel in Barcelona – and other companies such as MedGroup and Stein Group.

The alliance is the result of numerous investment opportunities that currently exist in the hotel sector in Spain, which broke a historical record in 2015 with the sale of 143 hotels worth €2,650 million, more than double the investment volume recorded the year before. Listed Socimis, hotel chains and Spanish family offices accounted for 74% of the investment, but this year overseas investors are expected to gain in weight and the alliance between HI Partners and Starwood is a good example.

“The Spanish hotel market is very attractive for us due to the growing demand from domestic and international clients and the on-going recovery of the economy”, said Keith Evans, Vice-President of Starwood Capital. According to the executive, the firm has chosen HI “because it is a reputable manager with local experience”, which will allow us to fulfil the objective “of creating a portfolio of high quality hotels in which all of Spain’s main tourist destinations are represented”.

In June 2015, Starwood reached an agreement with Meliá to acquire a chain of holiday hotels, which included seven assets and 2,933 beachfront rooms. These hotels were transferred to a company in which the fund owns an 80% stake and the hotel chain the remaining 20% stake. Meliá’s idea is to re-launch its Sol brand as part of this initiative.

According to sources at Starwood, the two alliances signed in Spain to date will have different investment strategies. Since its creation, the private equity firm has invested more than €77,000 million in real estate assets all over the world; its portfolio contains 2,600 hotels.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

KKH & Perella Pay €91 Mn For Deutsche Bank Building in Barcelona

11/07/2014 – Expansion

In the first large real estate transaction of the KKH Property Investors (set up by ex-CEO of Renta Corporación Josep Maria Farré) and U.S. manager Perella Weinberg, the teamed-up companies bought yesterday the tower of Deutsche Bank situated at 111 Paseo de Gracia street in Barcelona.

According to sources with knowledge of the operation, KKH Property Investors and Perella paid around €91 million for the property to three Andorran families: the Ribas, the Reig and the Cerqueda. They purchased the building in 2002 for about €80 million.

Initially, the one who was interested in the bidding for the tower was fund Emin Capital, the same that acquired the Torre Agbar also in Barcelona, which consulted KKH Property Investors. However, facing the alliance of KKH and Perella, the fund left the auction.

The buyers´target is to convert the office building into a luxury, five-star hotel with commerce added. Currently, the property houses the Cuatrecasas lawyers office that will stay as its tenant until the end of 2016.

KKH Property Investors foresees spending €500 million on the real estate shopping.

 

Original article: Expansión (by S. S.)

Translation: AURA REE

Reig, Koplowitz & Cutillas Dread the Future of Their Real Estate

30/04/2014 – El Confidencial

On May 5th, when Eurohypo finally seals the sale of its Spanish mortgage portfolio, María Reig (Reig Capital), Alicia Koplowitz (Omega Capital) and Carlos Cutillas (Inmobiliaria Chamartín) among others will get to know the new owner of their debt.

Since the branch of Commerzbank announced the sale of the €4.5 billion credit portfolio in January, many debtors started to suffer from insomnia. The threat that ApolloLone StarBlackstone or Cerberus could acquire the lot and through the debt execution snap all their most valuable assets is the doom´s day scenario for them.

Cutillas and his Inmobiliaria Chamartin are in the worst situation as Eurohypo´s Octopus Project contains €450 million in his loans.

Apart from Inmobiliaria Chamartin, the portfolio contains credits granted to such real estate giants as RealiaMartinsa-FadesaTesta and Metrovacesa, hotels like AC HotelesMeliáTrypHotusa and Kempinski and stores groups like HinesEroskiSonae and Rodamco.

Also, large private investors have a reason to fear. The most prominent in this case is Alicia Koplowitz who owes €100 million to Eurohypo through her manager Omega Capital. She used the financing given by the bank to buy the Rey Juan Carlos hotel and a building on the Castellana Street in Madrid and 50% of the Ritz hotels in Barcelona. Unfortunately for Koplowitz, the properties call great attention of investors exploring the Octopus Project assets.

In turn, businesswoman Maria Reig has got inside the portfolio a €120 million debt proceeding from acquisition of Mutua Madrileña with headquarters on the Almargo Street in Madrid.

 

Original article: El Confidencial (by Carlos Hernanz)

Translation: AURA REE