Tag: Starwood capital

Starwood Purchases Omega Park in Madrid and an Office Building in Barcelona

24 January 2019 -El Confidencial

The US fund Starwood Capital has taken another important bite out of the Spanish office market with the purchase of the entire portfolio of Autonomy, the Socimi whose main asset was the Madrilenian Omega Business Park, a giant corporate complex comprising four buildings spanning more than 33,000 m2, and which houses the headquarters of multinationals such as BP and Samsung.

The transaction, whose consideration amounted to €125 million, also includes an office complex in the sought-after 22@ district of Barcelona, which allows the US fund to also expand its presence into the Catalan capital and to make strides in its commitment to build an office portfolio in Spain worth €500 million.

To reach this objective, Starwood joined forces last year with Drago Capital, together with which it starred in the purchase of the Madrilenian San Fernando Business Park for €120 million, and which has also accompanied it in its purchase from Autonomy (…).

The Socimi, meanwhile, had put the for sale sign up over its whole portfolio a while ago. It constructed the portfolio with a clear opportunistic appetite during the worst periods of the crisis and it is now able to undo its positions with juicy gains.

In fact, at the end of 2017, Autonomy sold the jewel in its crown in Spain, the building located at number 4 Gran Vía, to the Riberas family, owner of Gonvarri and Gestamp, for €43 million, an amount that generated a gain of 40% for the opportunistic investor.

Following the sale of the office portfolio to Starwood, the Socimi is going to distribute €44.7 million as an issue premium, as well as an interim dividend of €51 million, amounts that in both cases will be paid into the accounts of shareholders on 30 January.

Moreover, once all of these operations have been completed, Autonomy will still have €10 million in cash and no assets under ownership, which means that it will have completed its objective of divesting all of its positions in Spain with juicy gains.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Starwood Capital Finalises the Purchase of an Office Portfolio for €125M

24 January 2019 – Expansión

The fund Starwood Capital is seeking to strengthen its presence in Spain with the purchase of a portfolio of offices in Madrid and Barcelona. Specifically, Starwood is finalising the purchase of an office complex in Madrid, comprising four buildings, and another one in Barcelona from the Socimi Autonomy for €125 million, according to explanations from market sources speaking to Expansión.

In the case of Madrid, the four office blocks are located in the north of the city, inside the Omega business park, in the Arroyo de la Vega area. They span a combined surface area of 33,458 m2 and have 940 parking spaces.

The Omega Business Park, which is home to the headquarters of companies such as Samsung, BP and Allianz, is located next to the airport of Madrid and has become one of the most established areas in the north of the capital.

Besides the offices in Madrid, the operation also includes a new build property in the 22@ district of Barcelona, with a surface area of 12,596 m2.

The building in Barcelona comprises two towers connected by a common entrance hall, with twelve and four floors, respectively. The building also contains commercial premises and 216 parking spaces.

The building on Calle Pallars is occupied by tenants such as Regus, General Electric and Ticketmaster. The operation has been advised by the real estate consultancy CBRE, on the vendor side, and by Drago Capital, which has advised the buyer and which will manage the properties (…).

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Elliott & Minor Enter the Bidding for HNA’s Stake in NH

30 May 2018 – Expansión

The bidding to acquire the stake owned by the Chinese holding company HNA in NH is entering the home stretch. The Asian giant has set this week as the deadline for the receipt of binding offers for its 29.5% stake in NH, which will be diluted to 25.5% following the execution of the hotel chain’s convertible bonds that are currently in circulation.

The investment funds that have made it to the final round are Lone Star, which has joined forces with the US hotel chain Hyatt to launch its offer, as well as Apollo and Elliott, who have also expressed their interest. Meanwhile, Starwood Capital and Blackstone, which both analysed the operation, have been excluded from the process.

The offers from the funds fall in the range of between €5.50 and €6.00 per share, according to market sources. Yesterday, NH’s share price closed at €6.39. Other sources explain that the funds have signed a standstill with the company so as to not exceed 20% in NH following the operation and whereby avoid having to launch a takeover bid for 100% of the entity at a low price.

These funds have also been joined by the Thai hotel chain Minor, which last week acquired €30 million of Oceanwood’s shares, representing 8.6% of NH, for around €190 million. The agreement includes a pact whereby the manager concedes Minor the right to exclusively negotiate the purchase of the rest of its stake in NH, which, after the bond conversion, will amount to 9.5%.

If it were to acquire all of HNA’s stake, Minor would clearly exceed the 30% threshold that would oblige it to launch a takeover bid for the entire company. In that scenario, the Thai group, whose shares are traded on the Hong Kong stock market, would have a number of alternatives: sell some of its stake on the market, buy fewer shares from HNA or request permission from the shareholders to launch a takeover bid (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Starwood Wins the Bid to Acquire the San Fernando Business Park for €120M

22 May 2018 – Eje Prime

Starwood Capital has sealed the purchase of a new asset in Madrid. The private equity fund has reached an agreement with Oaktree to acquire the San Fernando Business Park for €120 million. The operation, according to market sources, is pending the finishing touches, but technically has now been completed.

In this way, Starwood has broken into the Spanish office market by outbidding other international investors, such as the PE house Carlyle, which had expressed interest in the asset, according to Expansión.

San Fernando Business Park ended up in the hands of Oaktree three years ago. It was then that the US fund purchased a portfolio of unpaid debt worth €750 million from the German bad bank FMS Wertmanagement (FMS WM).

That portfolio included, in addition to this office complex, luxury hotels such as the Arts Hotel in Barcelona and another hotel in Cascais (Portugal); five shopping centres, including the Madrilenian Plaza Éboli and Heron City Las Rozas; several storeroom buildings; and some residential and industrial assets.

Original story: Eje Prime 

Translation: Carmel Drake

HFF Announces €110M Financing for Acquisition and Redevelopment of Ikos Andalucía

19 March 2018 – Business Wire

HFF Real Estate Limited (HFF) announces the €110 million first mortgage financing for the acquisition and redevelopment of Ikos Andalucía, a 400-room, luxury seafront resort in Andalucía’s coastal area of Estepona.

The HFF team has worked on behalf of the borrower, Ikos International, to place the five-year, floating-rate loan with Starwood European Finance Partners Limited, an affiliate of Starwood Capital Group. The loan proceeds will be used to acquire an existing hotel and institute a property improvement plan that includes reconstructing and refurbishing all existing hotel rooms, enhancing the arrival and lobby experience, expanding and repurposing the public spaces and rebranding the asset to the Infinite Lifestyle concept of the Ikos Resorts brand.

Created only three years ago, Ikos Resorts is an innovative owner-operator of luxury all-inclusive resorts throughout the Mediterranean that currently manages two operating properties in Greece with two others being delivered in May 2018 and May 2019, respectively (…) Ikos Andalucía, which will be the fifth hotel within the Ikos Resorts’ platform, is the venture’s inaugural resort in Spain (…).

Ikos International 

Ikos International, established in 2018, by main shareholders Andreas Andreadis, Mathieu Guillemin, Oaktree Capital Management LP, Goldman Sachs Asset Management, Hermes GPE and two family offices is responsible for the international expansion of Ikos Resorts, a leading European luxury hospitality company with in excess of 1,800 rooms being owned and operated or under development (…).

About HFF

HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry (…).

Original story: Business Wire

Edited by: Carmel Drake

CBRE: Hotel Inv’t Reached Record Figure of €3.75bn in 2017

29 December 2017 – Europa Press

Investment in the hotel sector in Spain grew by 83% in 2017 compared to the previous year, to reach a total transaction volume of €3.75 billion, according to data from the consultancy firm CBRE Hotels.

The cumulative figure represents a historical record in the Spanish market, exceeding the previous record set in 2015. The increase is primarily due to strong demand from investors to buy and capitalise hotel assets, whereby taking advantage of the economic and real estate recovery in Spain.

According to CBRE Hotels, 190 hotel assets were sold in Spain in 2017, up by 23% compared to 2016, which represented an increase of 25% in terms of the number of rooms sold (28,000). Moreover, a further 2,200 future rooms were also sold last year in buildings and projects still under construction.

The most sought-after hotel assets were 4-star establishments, accounting for 42% of all investments.

The Canary Islands and the Balearic Islands accounted for almost 40% of all investments

In terms of the main investment destinations in the hotel sector, the Canary Islands (21%) and the Balearic Islands (18%), together with Madrid (17%) led the ranking, followed by Barcelona and Málaga. The most significant changes compared to 2016 were seen in Barcelona and the two island regions, which went from accounting for 36% to 15% in the case of the former and from 24% (combined) to 39% in the case of the latter.

In terms of the type of properties, holiday hotels accounted for 60% of the total compared with 40% urban properties. On the other hand, buyers invested in individual assets in 60% of cases, rather than in portfolios (40%).

Regarding the type of buyers or investors that acquired the most hotel assets last year, including not only hotels but also tourist apartments, aparthotels and land and buildings destined for hotel use, institutional investors participated in 55% of operations, followed by private entities and family offices, with 22% of transactions, and other hotel chains, with 21%.

Main operations

The largest operation of the year involved HI Partners, the hotel platform that Banco Sabadell recently sold to Blackstone for more than €630 million. The change of owner of Edificio España also hit the headlines – it was acquired by Riu Hotels & Resorts for €272 million. And finally, the Wave portfolio, owned by Starwood Capital and Meliá, comprising 4 hotels in Lanzarote, Ibiza, Torremolinos and Mallorca, was sold in the middle of the year to London & Regional Properties, on advice from CBRE (…).

“The excellent performance of the main tourism markets and the excess liquidity in the capital market have led to a historic year with more than 150 transactions and where institutional players have been the protagonists once again”, explained the National Director of CBRE Hotels, Jorge Ruiz.

Moreover, he added that “the outlook is very positive and we expect to see more concentration in the market in 2018 and a renewed interest in the tourism industry in our country”.

Original story: Europa Press

Translation: Carmel Drake

Deloitte: Hotel Inv’t Will Exceed €3,000M In 2017

7 November 2017 – Expansión

The extraordinary tourism data in Spain, the interest from investors in real estate assets and the purchase by international funds of hotel portfolios has catapulted investment in the Spanish hotel segment so far this year to €2,600 million. That figure is 21% higher than the total amount recorded in 2016, and is very close to the record figure of €2,700 million recorded in 2015, according to The Hotel Property Handbook report, prepared by Deloitte España.

In this way, the hotel sector now accounts for 35% of total real estate investment in the tertiary sector (non-residential assets) in Spain. The firm forecasts that, by the end of this year, the investment volume figure will have easily surpassed the €3,000 million threshold.

In terms of the main operations of the year, the purchase by the US fund Blackstone of the HI Partners hotel portfolio, comprising 14 establishments, from Sabadell for €630 million and the acquisition by the British fund London & Regional of four Starmel hotels – a joint company formed by Meliá and Starwood Capital in 2015 – for €230 million, have given the investment figure a real boost.

Record operations

These operations have been accompanied by several one-off hotel transactions, such as Edificio España, which was acquired by RIU in June for €272 million (…).

Other noteworthy operations so far this year include the purchase of Hotel Silken in Barcelona by the British fund Benson Elliot for €80 million and the acquisition of 55% of Hotel Diagonal Mar in Barcelona by Axa for €80 million.

For Javier García-Mateo, Partner at Deloitte Financial Advisory, institutional investors are seeing the opportunity to build large portfolios of holiday hotels in Spain, to integrate them into their international platforms in the Caribbean, South America and South-East Asia, developing a direct channel and obtaining greater negotiating power with tour operators. “In the end, Spain is establishing itself as the world’s main tourist market”, he says.

In this sense, we are seeing the natural migration of traditional hotel owners, who are divesting property to focus on management, such as in the case of the Meliá chain, which is making way for overseas investors who have greater financial muscle and so can launch more ambitious projects, explains Patricia Pana at Deloitte Financial Advisory.

In this context, the large tour operators are also participating in the investment fever and are buying assets in order to carry out a vertical integration of their business (…).

Interest from investors is partly driven by the record number of visitor arrivals – more than 84 million international tourists are forecast to visit Spain this year – and the strong evolution of key performance indicators such as the average daily rate (ADR), revenue per available room (RevPAR) and the occupancy rate.

Peak returns

Specifically, the ADR in Spain reached an average of €82.30 in 2016, up by 5% YoY; the occupancy rate rose by four percentage points to 66%; and RevPAR increased by 10% to €53.90.

The challenges for the sector now include improving the hotel portfolio to allow for an increase in prices. “If we compare our hotels with those in other urban and vacation destinations, the price per room of Spanish hotels still has a lot of potential, provided that renovation and transformation projects are carried out with the help of the main operators”, says Ana Granado, Director at Deloitte Financial Advisory (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Starwood Capital Suspends Its Investment Activity In Cataluña

24 October 2017 – Expansión

The vehicle that the US firm Starwood Capital uses to finance real estate operations in Europe expressed its concern to the market on Friday about the situation in Cataluña. Starwood now has a presence in the autonomous region through a €46 million loan that it has granted to a new hotel in Barcelona.

Moreover, the firm has granted €61 million to two real estate projects in other areas of Spain. Starwood European Real Estate Finance, a fund that is listed on the London Stock Exchange, has said that from now on, it is going to “prioritise” its investments in other areas of the continent, keeping its distance from the Catalan crisis. “The political risk, and its potential impact on the real estate market, continues to be one of our areas of scrutiny, alongside, for example, the Brexit process, the elections in Germany and the latest events in Cataluña. The group is monitoring Spain and the situation in Cataluña closely. The tensions regarding Catalan independence are not new, but there has been a significant increase in the uncertainty there following the referendum on 1 October”, says Starwood in a note to update the composition of its investment portfolio.

The fund says that the reaction from the financial markets to these tensions has been relatively moderate and that economists predict a soft impact on economic activity in Cataluña and Spain as a whole. But the managers of this firm are more pessimistic. “Although the market has not reacted to the recent events, the group is more cautious and is only going to give priority to opportunities that are relatively isolated from the current uncertainty”. Starwood does not rule out taking another look at this market if prices adjust to the new reality. “During this time, the group will follow the political developments and also monitor the Spanish market to see whether any other attractive opportunities arise, on the basis of risk”.

Starwood’s message echoes the views of the real estate consultancy firm Colliers, whose managers said last week, in an interview with Expansión, that real estate investments amounting to €175 million have been suspended in Cataluña. Property developers such as Hispania and Merlin have also warned about the effect of uncertainty in the sector. Moreover, several private equity funds expressed their concern last Tuesday at a conference in the City of London.

Starwood European Real Estate, with almost €500 million in assets, is one of the vehicles that Starwood Capital Group uses to channel its investments. With $53,000 million under management in total, the entity holds other real estate positions in Spain through various funds. The California-based fund, founded in 1991 by Barry Sternlicht (pictured above) participated in the foundation of the hotel chain Starwood, which has now merged with Marriott.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Hispania Finalises Sale Of Its Office Portfolio To Swiss Life

24 July 2017 – Expansión

Hispania is stepping on the accelerator in its divestment process and is pushing ahead with negotiations to close the sale of its office portfolio. The Socimi in which the multi-millionaire George Soros holds a stake is negotiating exclusively with Swiss Life regarding the sale of more than twenty buildings for a price that will amount to approximately €500 million.

In the final stretch of the process, Swiss Life has fought off the other candidates, including Starwood Capital, and has positioned itself as the favourite to acquire this portfolio, which includes 24 office buildings in Madrid, Barcelona and Málaga, according to market sources.

The operation, which is currently in the due diligence phase, forms part of its asset divestment strategy, prior to its liquidation, which the real estate firm managed by Azora began in June.

The process

Sources at Hispania consulted in this regard say that the operation “is not closed and that the asset sales process is still on-going”.

Hispania’s portfolio includes 24 assets, with a gross leasable area of around 150,000 m2. At the end of the first quarter, Hispania’s office portfolio was worth €526 million.

Hispania closed its first quarter of the year in the office segment with an average rental income of €13.8/m2/month, which represents an increase of 7% compared to the first quarter of 2016. During the first quarter of 2017, the company signed new contracts for 5,085m2 of space, which allowed it to increase its occupancy rate to 82%.

Hispania, which was created in 2014, is scheduled to be sold in March 2020, when it celebrates its sixth anniversary since debuting on the stock market.

As part of this strategy, Hispania announced in June the sale of the Aurelio Menéndez office building, located on the Madrilenian Calle Suero de Quiñones.

That building, which has a gross leasable area (GLA) of more than 4,700 m2, was sold to a family office for €37.5 million, which represents a price of €7,800/m2.

Hispania’s total office portfolio includes 18 buildings in Madrid – representing 75% of the total – and a plot of land to be developed. Notable properties include Edificio Torre 30 – previously known as the NCR Building – located on Calle Albacete, which is leased to Grupo Ilunion and which has a gross leasable area of 11,417 m2. Moreover, the company owns the Cristalia Play building (pictured above), located in the Campo de las Naciones area of the city; the Foster Wheeler building, located in Las Rozas; and the Murano building, on Calle Emilio Vargas.

In addition, the company owns five properties in Barcelona and another one in Málaga.

Asset portfolio

Although the Socimi managed by Azora specialises in hotel assets, it has made significant investments in offices and the residential segment over the years since its creation.

At the end of the first quarter of the year, the company held a portfolio of assets worth €2,024 million. Of the total, €1,292 million corresponded to hotel assets, €526 million to office buildings and €230 million to residential assets.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Meliá & Starwood Sell 4 Hotels To London & Regional For €230M

10 July 2017 – Expansión

The Meliá Hotel Group is rotating its asset portfolio. Starmel, the joint venture that the Mallorca-based hotel chain controlled by the Escarrer family constituted with Starwood Capital in 2015, has sold four hotels to London & Regional in an operation worth €230 million, according to market sources.

The hotels in question are the Sol Príncipe de Málaga, Sol Lanzarote, Sol House Ibiza and Sol Palmanova in Mallorca. These establishments, which have been renovated recently, contain more than 2,000 rooms between them and will continue to be managed by Meliá following the operation.

This is not the first time that London & Regional and Meliá have crossed paths. In fact, the company owned by Ian Livingstone, one of the greatest real estate entrepreneurs in the United Kingdom, and the Mallorca-based hotel chain have been partners since 2013, when London & Regional purchased 50% of a hotel that Meliá was preparing in Ibiza. That operation opened the doors to the Spanish market for Livingstone.

Meanwhile, the alliance between Meliá and Starwood Capital dates back to 2015, when the hotel group sold seven establishments in the Balearic Islands, the Canary Islands and Andalucía, worth €176 million, to Starmel. The fund controls an 80% stake in the joint venture, whilst Meliá, which recorded profits of €35 million from that operation, owns the remaining 20%. The partners planned to allocate €30 million to the renovation and repositioning of those hotels, which Meliá will continue to manage for the next 15 years.

In parallel, Starmel is continuing to look for opportunities to acquire new assets, with the focus on holiday resorts in the Mediterranean area. Hotels have become one of the preferred assets for investors.

According to data from the consultancy firm CBRE, investment in hotels exceeded €2,000 million during the first half of this year, which represents an increase of 170% compared to the same period in 2016. During this period, operations involving one hundred establishments have been closed, affecting 14,000 rooms in the Spanish market. In this case, CBRE has advised Starmel in the operation. “The assets are located in key tourist areas. Together with those destinations, Madrid and Barcelona are continuing to attract international investors, which reinforces the strength of the Spanish hotel market as an investment destination for the international investment community”, said Miguel Casas, Director of CBRE Hotels España.

Forecasts

The share price of Meliá Hotels International fell by 0.62% on the stock market on Thursday (following the announcement) to €12.88. The hotel chain, which has a market capitalisation of €2,959 million, has seen its share price rise by 16.25% so far this year.

For the year as a whole, Bloomberg’s analysts forecast that Meliá’s revenues will rise by 6.75% to €1,927 million and the net profit will increase by 12.45% to €116.5 million, according to the experts.

Original story: Expansión

Translation: Carmel Drake