Barceló To Buy Back Crestline & Integrate Its 100 Hotels

25 January 2017 – Expansión

Barceló wants to become the sole owner of Crestline Hotels & Resorts once again and to strengthen its position in the USA. The Spanish group, which sold a 60% stake in the company to the fund ARC in 2013, is going to repurchase that stake and take back control of the entire US hotel management company, according to sources familiar with the deal.

Crestline Hotels & Resorts began operating in 2000, when its then owner, Crestline Capital, acquired Dubai Empresas and Stormont Trice Hospitality to create a hotel management company. In 2002, the Barceló Group acquired the group and renamed it the Barceló Crestline Corporation.

At the end of August 2013, Barceló decided to unwind some of its shareholding in Crestline and reached an agreement with the investment fund ARC to sell 60% of the company, which saw the group become a minority shareholder. This agreement included a clause that gave Barceló the right to repurchase its stake and that right is due to expire this year. The group intends to exercise this right, say the sources.

Currently, Crestline Hotels & Resorts manages more than one hundred assets in the country, which will be added to the existing hotel portfolio controlled by the Barceló group. This operation will allow the Spanish group to considerably strengthen its presence in USA, by consolidating the assets managed by Crestline onto its balance sheet.

Barceló, which presented its balance sheet for 2016 last Tuesday, along with its strategy for the next few years, is seeking to increase in size and continue to diversify its portfolio. Specifically, the company is looking towards the Middle East, a market it would like to enter through an alliance with a local partner.

Moreover, the Barceló Hotel Group has set itself two challenges for 2017. On the one hand, it wants to continue its expansion into the main provincial capital cities in Spain and the main cities in Europe, as well as into urban destinations in Latin America, especially in Mexico.

On the other hand, the company is planning to take the first steps of the agreement signed with Planeno in June 2016. The objective of the alliance is to reach a minimum of 100 establishments over the next 10 years.

In 2016, the company opened 12 hotels and this year it plans to add 20 new establishments to its portfolio. Specifically, last year, the chain incorporated hotels in new countries such as Panama and El Salvador; in urban destinations such as Querétaro (Mexico); in locations where the Mallorcan group is already established, such as Prague (Czech Republic), Istanbul (Turkey), Madrid, Fuerteventura, Lanzarote and Bilbao; as well as three hotels in Granada, where it previously had no presence, whereby fulfilling one of its priority objectives of expansion.

Original story: Expansión (by Rebeca Arroyo)

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