Meliá Finalises Sale & Leaseback of Palacio de Congresos Hotel in Valencia

20 July 2018 – Las Provincias

The tallest skyscraper in Valencia is on the verge of changing hands. The sale of Meliá’s Palacio de Congresos Hotel, located on Avenida de las Cortes Valencianas, number 52, is being finalised for €50 million, according to sources speaking to Las Provincias. The operation is expected to be signed in September and several investors have expressed their interest in acquiring the former Hilton Hotel.

The owner of the iconic property, the fund Colony Capital, took just two months to put it on the market after acquiring it in February when it purchased the fund Continental Property Investments (CPI), the former owner of the hotel. According to the same sources, the candidates to acquire the building now include Socimis, institutional investors and family offices, such as the Valencian Zriser group, the firm owned by Pablo Serratosa. Another interested player is AXA Real Estate, the company that acquired the Hilton Hotel Diagonal Mar in Barcelona last year.

Despite the change of owner, the management of the hotel will continue to be entrusted to Meliá, which signed an extendable 10-year operating contract in 2011. It is a strategic asset for the hotel group, given its location next to the Palacio de Congresos, which makes it the best-positioned accommodation on the market for business people and guests of events organised in the Valencian enclave.

A yield of 5%

According to sources familiar with the operation, the asking price for the hotel was €45 million, which was the “minimum to make an offer”. Nevertheless, the market was pricing it at around 10% more, approximately €50 million and some even think that it will be sold more than that. “Socimis and institutional investors look for yields of 5% per year”, they reveal.

In addition, the sale price per room will range between €165,000 and €175,000. In terms of the price per overnight stay, hotels of this kind with an occupancy rate of 80% typically range between €90 and €95 per room. The expectation is that the former Hilton will cost around €100 per night in five years time.

The former Hilton is a 5-star hotel that opened its doors to the public in May 2007. It stands 117 m tall and has 29 storeys, with 269 rooms, 33 suites and two presidential suites. Moreover, it has a convention room and 18 meeting rooms. The building was constructed between 2002 and 2006 at a cost of €110 million, double the price at which the owners want to sell it for now. It was in 2010 when the owner company, the firm Hotel Palacio de Congresos SL, sold the property to CPI to avoid its definitive closure after that company filed for voluntary creditor bankruptcy.

Original story: Las Provincias (by Elísabeth Rodríguez)

Translation: Carmel Drake

Majestic Takes Over the Management of Messi’s Hotel in Ibiza

10 April 2018 – Expansión 

Majestic Group is going to be responsible for managing the hotel that Leo Messi has purchased in Ibiza. It is not the first time that the footballer has placed his trust in the Catalan family chain, given that the firm already manages the establishment that the Barcelona striker acquired last year in Sitges (Barcelona).

The Argentinian football, who paid €30 million for Hotel MiM Sitges, has now acquired the Es Vivé Hotel in Ibiza for an amount that has not been revealed yet. His latest establishment, which was opened in 1959 and renovated four years ago, has 53 rooms and is located next to Playa de Figueretes; it is relatively close to Playa d’en Bossa and the city if Ibiza. The hotel is going to change its name to MiM Ibiza Es Vivé.

Market sources indicate that this establishment was one of the properties that Cristiano Ronaldo considered buying after he expressed his intention of acquiring a hotel on the island. The hotel, which, for the time being, only operates during the summer season (between March and October) charges an average price of €225 per room, although that figure varies significantly depending on the type of room and the time of year; in August, the rate can rise to more than €500.

Majestic Group, owned by the Soldevila-Casals family, manages seven hotels and three apartment buildings, located in Barcelona, Sitges, Palma de Mallorca and now also in Ibiza.

Original story: Expansión (by M. Anglés)

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

Deloitte: Hotel Inv’t Will Exceed €3bn in Spain in 2017

28 November 2017 – Expansión

Spain is going set a new record in terms of hotel investment this year, with a forecast figure of more than €3 billion. Moreover, one quarter of that investment is going to be concentrated in the Canary Islands (almost €0.8 billion).

In Las Palmas, this week, Deloitte presented the white book on the sector, together with the Association for Progress and Management, led by Francisco Torres (Renta 4). Javier García and Ignacio Medina, Partners at Deloitte, highlighted the competitive strength of the Spanish tourism sector – the country receives 80 million visitors per year and has a legal and climatological environment that “make it unique”. “We are not able to be a destination for those with the highest purchasing power because the hotel stock is very obsolete. We need to invest just a little, if at all, to meet the requirements of tour operators”.

Nevertheless, Deloitte remains optimistic ahead of the upcoming challenges. “We are facing an exciting cycle because the map of players is changing, with new roles in terms of investors, financiers and hoteliers”.

Average daily rates are experiencing increases of 30%, with occupancy rates of 87%, but Deloitte warns that the “favourable wind is not going to last forever”. “We cannot resign ourselves to being such a cheap place”.

The incidence of falling prices is especially significant in the Canary Islands. The autonomous region has a supply of 350,000 beds, but, with the exception of a few establishments, such as Carlton Ritz Abama (Tenerife), the market is a long way from luxury tourism; its average tariffs range between €60 and €90. “They don’t even come close to the €300 or €700 per night that guests pay for certain hotels on the Costa del Sol”.

Deloitte proposes six axes for the investment challenge over the next few years: innovation, sustainability, digital transformation, renovation, brand enhancement and tailor-made experiences (…).

Javier García places particular emphasis on the role of financing, where entities are boosting hotel activity. Guarantees from the banks are conditioned by the presence of an international operator, the business plans and the ownership of the land.

Deloitte revealed that international operators such as the fund Blackstone have become some of the most capable in terms of proving that a renovation process can result in tariff improvements of up to 40%.

In October, Blackstone acquired the hotel division of Sabadell in Spain (HI Partners) and, in the case of the Canary Islands, it is not the only player. Private equity firms such as KKR and Hispania are very active at participating in the “substitution effects”, as Deloitte defines them. “As Don Emilio Botín always used to say, the best business involves being the first to enter and the first to leave”.

Original story: Expansión (by José Mujica)

Translation: Carmel Drake

Antonio Calero Acquires Paseo Neptuno, 72 In Valencia

4 November 2016 – Real Estate Press

Through one of his companies, the businessman Antonio Calero has acquired the building located on Paseo de Neptuno, number 72, owned until now by Ernesto Martínez Colomer.

Calero is the main shareholder of the Marina Beach Club complex in Valencia, whose name will also be used on this occasion.

With a total investment of €14 million, to cover the cost of buying the building and converting it into a hotel, Calero, plans to turn the property into a hotel and restaurant.

The three-storey building has a similar structure to those of other hotel complexes in the surrounding area, which has been established by the municipal legislation that applies to the area, and especially to these types of buildings that overlook the Paseo Marítimo and the beach.

The municipal constraints also affect the design of the property, in such a way that the final façade still needs to be agreed in conjunction with the Town Hall of Valencia. In any case, the project has been assigned to the architect José Martí from the ERRE studio, a personal friend of the businessman, who is looking for a totally renewed and different concept at the club, with the fundamental premise that the complex be “very representative of the Valencian character”.

Each one of the hotel’s 50 rooms will be fashioned by a local designer, who will source supplies from major companies in the furniture and furnishings sector, including Andreu World, Viccarbe and Porcelanosa, according to Calero. “The idea is that our clients will be able to experience up to 50 different nights”, said the owner.

Calero also highlighted the “exclusive” character of this new project. The price per room will reflect the rates charged in the area for a 5-star hotel. Although the figures have not been determined yet, competitors in the area charge between €150 and €900 per night.

Those figures are based on low season rates at the nearby Hotel Balnerio Las Arenas, located just a few metres away. At Hotel Neptuno, which is also nearby, but which is a 4-star property, prices range between €100 and €400 per night.

In any case, to obtain the highest distinction in terms of hotel category, the owner will have to make a series of structural changes to the property, which still need to be defined.

The purchase has just been completed, which means that the project is in its very early stages. The application for the building licence and permits will now be submitted and the construction work is expected to take at least 15 months, which means that it is unlikely that the hotel will open for another two years. In other words, the new hotel should be ready for summer 2018.

Original story: Real Estate Press

Translation: Carmel Drake

INE: Overnight Hotel Stays Reached 46.4M In August

26 September 2016 – Expansión

Overnight stays rose by 3.8% and revenues increased by almost 9% in August 2016, boosted by visits from overseas tourists. Nevertheless, domestic demand only increased in Cataluña.

Although the summer season does not officially end until October, Spain’s hotels can already say with some satisfaction that the summer of 2016 has been one of the best of their lives. The average occupancy rate reached 79% in August, the best figure since analysis of this data first began back in 1999, according to a report published on Friday by the National Institute of Statistics (INE).

In the eighth month of the year alone, 46.4 million overnight hotels stays were recorded, up by 3.8% compared with August last year, thanks to a 6.3% increase in stays by foreign tourists; overnight stays by Spanish tourists decreased by 0.3% YoY.

But it was not only a quantitative increase, given that establishments also increased their revenues. They obtained €79.57 for each available room, compared with €73.10 in August 2015. The Hotel Price Index (IPH) carried a lot of weight in that YoY increase of 8.8%. The IPH is prepared on the basis of prices that businessmen in the sector receive from all of their clients: households, companies, tour operators and travel agents. The IPH stood at 6.9% in August, which represents 1.9 points more than a year ago.

Over the last twelve months, revenues have increased by 5.2% on average, with the most acute increases being observed for three-star (9.01% YoY in August) and four-star accommodation (6.97%).

INE’s information reveals that overnight stays in July and August grew by 5.4% compared with the same two month period in 2015, thanks both to record levels of international tourists (9.6 million visited in July, up by 9.3%) as well as the gradual recovery of domestic demand. In this aggregated period, overnight stays by foreigners and Spaniards rose by 7.2% and 2.4%, respectively (…).

Original story: Expansión (by Yago González)

Translation: Carmel Drake

Hotel Sector Returns To 2008 Profitability Levels

20 November 2015 – Expansión

The end of the crisis is in sight for the hotel sector, not only in terms of the number of tourists, but also in terms of revenues. “We are not only talking about record numbers in terms of visitors (foreigners), now the records in terms of overnight stays and occupancy rates are also important”, said Juan Molas, the President of the Spanish Confederation of Hotels and Tourist Accommodation (‘Confederación Española de Hoteles y Alojamientos Turísticos’ or Cehat) yesterday, as he presented the latest edition of the “Observatory for the Spanish Hotel Industry”, prepared in conjunction with PwC. This report shows that the profitability of the hotel sector has soared in the last year, in terms of both the average occupancy rate of each hotel and the price per room.

Specifically, hotel room rates rose by 6.1% during the first nine months of 2015, with respect to the same period a year earlier, up to an average of €71.50 per day, taking it to levels very close to those last seen in 2008. Moreover, the number of days that each room is occupied for each year also grew, by 3.4%. Therefore, profitability, which reflects the combination of both indicators, has grown by 9.7% in the last year and has accumulated growth of 18.7% since 2013. It is now exceeding levels last seen before the crisis.

Looking ahead to the winter season, hoteliers are more optimistic than they ever have been since the report was first prepared in 2012. Specifically, the index that analyses the expectations of the sector has risen by 35.4%, from 52.5 points in 2014 to 71.1 points now. This indicator is based on a scale of 0 to 100, where numbers above 50 points indicate an improvement in the situation with respect to previous years. Moreover, the values rise significantly in the case of average prices, where the index reaches 81.8 points, a strong increase of 44% with respect to the 56.8 points recorded in 2014. Álvaro Klecker, Partner for Tourism at PwC, says that this increase in prices has been due to an “increase in complementary services, as well as in petrol, which contains the cost of transport”, giving hotels a greater margin to raise prices.


On the other hand, Molas rejected the idea that the massacre in France (last Friday) would have any effect on tourism in Spain. He gave the example of the Smart City Expo World Congress, which is taking place in Barcelona at the moment. He also added that this weekend, hotels in the Spanish capital are “almost all full” because of the Madrid-Barça Classico match.

Original story: Expansión

Translation: Carmel Drake

Hotel Villa Magna On The Market For €180M

2 June 2015 – Expansión

Madrid/ Sodim, the holding company owned by the Portuguese family Queiroz Pereira, is looking for a buyer for the five star hotel it acquired for €80 million in 2001.

Following the sales of the InterContinental and Ritz hotels to the Qatari sovereign fund and the alliance formed by Mandarin and the Saudi firm Olayan, respectively, it is the turn of Villa Magna. Sodim, the holding company owned by the Portuguese family Queiroz Pereira, has put the hotel, which it purchased from the Japanese company Shirayama in 2001 for €80 million, up for sale.

Sodim is asking €180 million for the five star property, located on Paseo de la Castellana. If it achieves its goal, it will become the largest operation to be signed in Madrid, ahead of the Ritz – €130 million – and the InterContinental – €70 million – but behind the €200 million paid by the Qatari Diar fund for Hotel Vela in Barcelona in 2013.

The operation, which is in its initial phases, may attract interest from foreign investors and international hotel groups wanting to improve their location or enter Madrid’s market, such as Hyatt, Hilton, Shangri-La, Kempinski and Jumeirah, amongst others.

Hyatt managed the Hotel Villa Magna for almost two decades until 2009, when following the complete renovation of the hotel, the owners decided to take over the management themselves. Sodim also owns the Hotel Ritz in Lisbon, which is operated by Four Seasons, which is itself finalising its entry into the Spanish market, at the Canalejas complex in Madrid, together with Juan Miguel Villar Mir.

Hyatt no longer has a presence in Spain after it exited the Villa Magna and La Manga (Murcia). Its name has also appeared on the list of candidates to take over the management of the Hotel Miguel Angel, whose future is still not clear. Its owner, the British investor of Iraqi origin Nadhmi Auchi, is operating the property following Occidental’s exit last year.


The Hotel Villa Magna underwent a major refurbishment several years ago. It closed its doors on 1 August 2007 and reopened again at the beginning of 2009…€50 million was invested in total…the result was a hotel with fewer, but more luxurious rooms. The property retained its distinctive pink granite façade and the number of rooms decreased from 182 to 150. In exchange, the number of suites increased from 18 to 50. It also expanded its gastronomic and leisure offer, with new restaurants and a spa. Since 2009, it has offered rooms measuring between 30m2 and 290m2 – the Royal Suite.

The average room rate at the Villa Magna starts from €310 per night for a standard room. The Royal Suite costs €16,000 per night.

(….) The luxury hotel sector has been hit by the crisis, although the Villa Magna has not suffered as much as some. In 2013, it generated turnover of €19.29 million, up 4.8%…and the net profit was €3.68 million, compared with losses of €14.89 million in the previous year.

Nevertheless, the hotel closed 2013 with negative equity of €33.8 million, due to financial charges and impairment losses. Its financial debt exceeded €70 million. Even though it has the backing of Sodim through equity loans, the auditor PwC warned of significant uncertainty in terms of the hotel’s capacity to continue as a going concern.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake