Apple Leisure Group Debuts in Spain with its Purchase of a Majority Stake in Alua Hotels

23 January 2019 – Revista 80 Días

The US group is one of the largest managers of accommodation in the Caribbean. This purchase allows it to enter the vacation segment and the European market.

Apple Leisure Group (ALG), one of the largest hotel investors in the USA, has acquired a majority stake in the share capital of Alua Hotels and Resorts, the hotel group founded in 2015 by its main executives and the private equity fund Alchemy Partners. The amount of the purchase has not been revealed, although the joint operating result of the chain’s main hotels amounted to €6 million in 2017. Given that the properties are located in areas with high tourist demand and good forecasts, the amount of the operation could have exceeded €40 million, based on the multiples that are typically used for this type of transaction.

With this acquisition, ALG is entering the European market through the sun and beach holiday segment. And it is doing so in a country such as Spain, which receives more than 80 million tourists per year in search of that kind of offer. Alua Hotels has 11 hotels located in Mallorca, Ibiza, Fuerteventura and Tenerife, together with an apartment building in Ibiza.

In total, ALG will manage more than 3,000 4-star hotel rooms, focused on the type of tourist who wants a superior service to that usually found in the average accommodation establishments in beach areas. The US company is planning to undertake more acquisitions in the European market and has announced that it wants to become a reference player in the main destinations in the Mediterranean (…).

Apple Leisure Group is one of the most important investment conglomerates in tourism in the USA. It used to be owned by the investment fund Bain Capital (…), which sold it in 2017 to the funds KSL Capital Partners and KKR for an undisclosed sum. (…). According to data from the conglomerate, it manages 14 brands and handles more than 3.2 million passengers per year (…). Its turnover exceeds USD 3 billion per year (…).

Original story: Revista 80 Días 

Translation: Carmel Drake

HG Inaugurates its First Urban Hotel & Prepares another Vacation Project

15 January 2019 – Alimarket

The chain HG Hoteles has opened the 4-star HG City Suites Barcelona aparthotel containing 58 accommodation units on Avenida Vía Augusta 89, in the Sarrià-Sant Gervasi district of Barcelona. The establishment is the result of the purchase and complete renovation of a building that used to house the Hotel NH Belagua (3* and 72 rooms), which was active until March 2017. The renovation project has resulted in both an increase in the category of the property from 3* to 4*, as well as a reduction in the number of rooms in order to offer units that are apartment-suites and studios.

The new HG City Suites Barcelona is located just a few minutes walk from Avenida Diagonal and Paseo de Gracia. It is surrounded by services, is next to some of the most prestigious medical centre in Barcelona, and is very close to the Sant Gervasio, Plaza Molina and Fontana metro stops”, explained the company. With his hotel, HG, which has just celebrated its 50th anniversary, is making its debut in the urban hotel segment and is opening a new path of expansion.

Cristian Park will open in 2020

Nevertheless, the company’s next new property will be in the vacation sector and is scheduled for opening at the end of 2020. As Alimarket Hoteles reported, it will consist of the opening of a 4* new build aparthotel, to be operated by the owner, in the south of Tenerife, where HG Hoteles already has several apartment blocks: ‘HG Cristian Sur’ (3* and 90 rooms) and ‘HG Tenerife’ (3* and 189 rooms), in Los Cristianos. Indeed, it will open the future HG Cristian Park in that same town, with 202 accommodation units.

HG’s sun and beach offer is completed with the HG Lomo Blanco apartments (3* and 131 rooms) in Lanzarote, as well as some aparthotels in Menorca, namely: the ‘HG Jardín de Menorca’ (4*-144) and the ‘HG Cala Llonga’ (3*-30). The rest of its portfolio is made up of ski and mountain properties, including: the Huesca hotels ‘HG Alto Aragón’ (4*-134) and ‘HG Cerler’ (3*-101), the Girona-based ‘HG La Molina’ (4*-65), the Navarran ‘HG Isaba’ (3*-49) and the Granada-based ‘HG Maribel’ (4*-30).

Original story: Alimarket (by Paco Mota)

Translation: Carmel Drake

Construction Companies Look for Land in the Canary Islands for 2,000 Subsidised Homes

3 October 2018

The Association of Construction Companies is analysing Sareb’s real estate portfolio, which includes 2,900 properties on the Islands.

The builders are looking for land in the Canary Islands to finalise a “quick and complementary” housing plan before the end of the year that benefits the most disadvantaged segments of the population. The Association of Construction Companies and Developers of the Province of Las Palmas (AECP) met yesterday with a delegation from the Bank Restructuring Asset Management Company (Sareb), Spain’s so-called bad bank, to analyse the company’s assets on the Islands and potentially acquire the land necessary to follow through on their plan.

The president of the association, María de la Salud Gil, stated that the construction of some 2,000 subsidised homes, both for sale and for rent, is the goal of the initiative. “We have decided to develop a public-private housing policy and treat housing needs from a generalised perspective, creating a housing policy capable of serving every stratum of the population in function of their profiles,” she stated. For this, the builders are negotiating with different financial entities and developers to locate plots of land and “unfinished assets.”

Ms Gil explained before the meeting that the Government of the Canary Islands has full powers and jurisdiction in housing matters. “Therefore, it can structure procedurally agile rules and eliminate all the bureaucracy surrounding the creation of subsided housing.” She also stressed that housing and developments must attend three basic parameters: price per square meter, people who may buy or rent the properties and any support received by the interested parties.

Real estate assets

Sareb, which was formed in 2012, as a result of the nationalisation of four Spanish banks, has assets in the archipelago valued at 240 million euros. The portfolio is made up of some 2,900 properties, including land and housing, representing 2.5% of the company’s holdings in the country as a whole. Sareb has one thousand homes and 300 plots of land in Las Palmas, while it has 450 houses and 130 plots of land in Santa Cruz de Tenerife. The value of Sareb’s loans, which are secured by properties, is €550 million. In the Islands, the so-called bad bank has about 1,000 financial assets, representing 2% of the company’s total.

Ms Gil also explained that the development of subsidised housing is not linked with the construction of free housing or any size of homes. “It’s not just about building subsidised housing; it’s about addressing the housing market from a universal perspective,” she said. Even so, she explained that the association is trying to convince developers not to abandon subsidised housing because she believes that it helps “structure and balance the market and rental prices.”

Despite noting that the sector is currently held back by the delay in signing the pending state agreements, the president of the AECP stated that the construction industry already has “the muscle” to address the initiative.

Original Story: La Opinión de Tenerife – A. Rodríguez

Translation: Richard Turner

Transactions and Prices for Land Recovering on the Canary Islands

26 August 2018

Transactions for land are once again taking off thanks to the housing market, particularly rentals. In the first quarter of 2018, 182 operations were carried out for 36 million euros, up 35% y-o-y.

The land market is once again taking off in the Canary Islands. The observation comes from data published by the Ministry of Development and is largely due to the growing demand for housing, especially for rental. In the first quarter of this year, the most recent available data, 182 urban land transactions were carried out on the Spanish archipelago, an increase of 29% over the previous year. The increase reached 10% with regards to the previous quarter.

The figure places the Canary Islands among the Spanish regions with the highest increase in land operations. When broken down by province, there was the same number of transactions in Las Palmas as in Santa Cruz de Tenerife, though the rebound in the eastern province was higher in relative terms, going up by 34% compared to 25%. These are the highest figures for land operations since 2009. In recent years, less than one hundred plots of land were being sold per quarter, according to the Ministry’s data. Before the crisis, nearly 1,000 plots of land were sold on a quarterly basis.

The transactions for land included a total area of 195,000 square meters, almost 20,000 more than a year before. The figure is similar to the 165,000 square meters transacted in the first quarter of 2008, although the crisis even saw a few years with high levels of square meters of land sold, such as 2016 when transactions were made on 463,900 square meters or 475,600 2014.

These operations, however, stem from construction records not always linked to housing.

Despite the improvement, the total amount of square meters sold continue to be well below those before the crisis, when sales exceeded one million square meters per quarter. However, the quantity of funds involved has shown a real recovery. The 182 transactions in the first quarter had a value of 36 million euros, 35.4% more than the previous quarter and 36.2% more than the previous year.

This upturn explains the rise in the housing prices of around 4-5% this year.

At the provincial level, the land in Las Palmas has greater value, since 91 transactions were closed for more than 20 million euros, while in Santa Cruz de Tenerife the same number of transactions was carried out for less than 16 million euros.

The last year that saw such a high level of sales was in 2009. Then, 282,200 square meters were sold for 36 million euros.

The quarter that saw the lowest value since the beginning of the crisis and to date was the first quarter of 2010. At the time, 72,000 square meters of land sold for a value of 12.5 million euros. The cost per square meter of land reached 195.6 euros in the first quarter, according to the Ministry of Development’s data.

The trend in land transactions in the Canary Islands in the first quarter is in tune with its growing real estate market, especially in city centres. These days, it is possible to see cranes and buildings under construction and land being prepared for new buildings in the cities in the Canaries. The new reality is still a far cry from the boom years. Experts believe that those records will never be reached again.

Original Story: – Silvia Fernández

Translation: Richard Turner


RIU Submits Bid to Acquire Buena Vista Hotel in Tenerife for €71M

26 July 2018 – Preferente

The hotel chain RIU has submitted an offer to purchase a hotel in Tenerife that has been put up for auction following the bankruptcy of its owner and which the hotel chain has been managing for the last 10 years on a rental basis, according to El Confidencial.

The hotel company headquartered in Mallorca has offered €71 million for the Hotel Riu Buena Vista, located on Playa Paraíso in Adeja, which has just been put up for auction as part of the bankruptcy process that its owner has been immersed in for the last five years.

RIU has been renting the hotel for ten years and is now trying to take ownership of it, pending the outcome of the auction, which is expected to happen within a period of fifteen days. The chain claims that, given its status as the tenant, it has the right of first refusal over the property.

The chain led by Carmen and Luis Riu has four hotels in Tenerife and 7,000 rooms in total across the Canary Islands as a whole.

Original story: Preferente (by R.P.)

Translation: Carmel Drake

MGM Muthu Hotels Buys Second Hotel in Tenerife

22 December 2015 – Hosteltur

MGM Muthu Hotels has purchased the 4-star Hotel Golf Plaza, located in the south of Tenerife, containing 174 rooms. It represents the firm’s second establishment on the island together with the 3-star Muthu Royal Park Albatros. The Singapore-based group declined to reveal the consideration of the operation.

With the Grand Muthu Golf Plaza Hotel, the chain is strengthening its offer oriented at both family and couples vacations, with rooms adapted to the tastes and needs of both types of consumer at the two establishments.

Currently, MGM Muthu Hotels owns seventeen 3- to 5-star hotels in Portugal, Spain, the United Kingdom, India and Singapore. In Spain, besides the two properties in Tenerife, the company owns the Grangefield Oasis Club on the Costa del Sol, and the Infiniti Beach Resort in Almería.

Soon, the firm is going to open a 5-star hotel containing 500 rooms in Cayo Coco (Cuba), the Gran Muthu Cayo Coco, as Hosteltur revealed, which will be the first hotel owned by an Asian chain in Cuba.

The Group is now also negotiating the acquisition of hotels in Lourdes (France), Punta Cana and Riviera Maya to incorporate them in 2016 and whereby continue with its expansion.

Original story: Hosteltur

Translation: Carmel Drake

Spring Hotels Buys 62,000 m2 of Land in Tenerife for €85M

10 January 2018 – Eje Prime

The Spring Group now owns four hotels in Tenerife. The Canarian company, based in the tourist town of Arona, has invested €85 million in the purchase of 62,000 m2 of land its home municipality, where it is going to build a 525-room hotel.

The establishment will be located in the El Mojón area, in Los Cristianos, and will allow the chain to increase its offer on the island, where it already owns three other assets: Arona Grand Hotel, Vulcano and Bitácora.

The island group hopes to obtain the construction licence within the next few months in order to start work on the construction of the hotel as soon as possible. This new land purchase forms part of the investment plan that the company has underway. It has already spent €30 million on the complete renovation of its other establishments.

Original story: Eje Prime

Translation: Carmel Drake

CNMC Approves Sabadell’s Sale of Hotel Socimi to Blackstone

4 December 2017 – Eje Prime

The sale of Sabadell’s hotel Socimi has been given the go-ahead. Spain’s National Markets and Competition Commission (the CNMC) has given the green light to the first phase of the sale of Banco Sabadell’s hotel subsidiary, HI Partners, to the US fund Blackstone for €630.7 million.

The operation was agreed in October through the company Halley Hodco, which is controlled by the US investment fund. The sale of the Socimi will generate a net profit of €55 million for Sabadell and will improve its capital ratio by 22 basis points this year.

A few months ago, the Catalan bank engaged Credit Suisse, Citi and JP Morgan to work on the possible IPO of the hotel chain, but in the end, the financial institution decided to completely divest the company.

In addition to Blackstone, the fund Brookfield also bid for the purchase of the company, which was created only two years ago. HI Partners has a portfolio of 29 assets and is worth €1 billion. Its hotels include the Abora Catarina in Maspalomas (Gran Canaria); the Ritz-Carlton Abama and the Jardín Tropical, both in the province of Tenerife.

Original story: Eje Prime

Translation: Carmel Drake

Sabadell Sells Its Hotel Management Company To Blackstone

17 October 2017 – Expansión

Sabadell has sold 100% of the share capital in HI Partners, its hotel management platform, to Halley Holdco, an entity controlled by funds advised by subsidiaries of Blackstone. The transaction price amounted to €630.73 million, according to a statement filed by the bank with the CNMV. Nevertheless, the definitive valuation will be subject to “possible non-material adjustments” and “is conditional upon obtaining the necessary authorisation from the National Securities Market Commission (CNMV)”.

Sabadell will recognise a net gain of €55 million in its results for this year as a consequence of the sale. Moreover, it will improve its maximum quality capital ratio (CET 1 without full implementation of Basel III) by 22 basis points. In June, its capital ratio amounted to 12.67%, in accordance with the calendar for the gradual adaptation of the rule, and to 12.1% assuming the full application of Basel III (fully loaded).

HI Partners is one of the largest managers of hotel assets, including debt, in Spain, with 29 properties in its portfolio and 4,793 rooms in total. Its establishments include the Hotel Ritz-Carlton Abama, in Guía de Isora (Tenerife); the Hotel Abora Catarina, located in Maspalomas (Gran Canaria); and the Hotel ME Sitges Terramar (Sitges), the Hotel Hilton Sa Torre, in Llucmajor (Mallorca); and the Abba Acteon, in Valencia.

Before the summer, Sabadell engaged the investment banks Citi, JP Morgan and Credit Suisse to sound out the market regarding the possible placement on the stock exchange of its hotel management subsidiary.

In addition to Sabadell’s majority stake, HI Partners’ other shareholders include the company’s management team, comprising Alejandro Hernández-Puértolas, Sergio Carrascosa and Santiago Fisas. Its most recent operations involve several agreements with the Canary Islands-based hotel group Lopesan, from which it purchased the hotels ‘Ifa Dunamar’, ‘Ifa Continental’ and ‘Ifa Beach’.

Original story: Expansión

Translation: Carmel Drake

Blackstone & Brookfield Submit Bids To Buy HI Partners

5 October 2017 – Eje Prime

Sabadell may be selling off its hotels. The Catalan bank has received two offers from two international investment funds to divest its hotel chain, HI Partners. The interested parties are Blackstone and Brookfield, who have submitted bids to purchase all of the assets owned by Sabadell’s subsidiary.

HI Partners has been preparing its debut on the stock market, for which it has engaged Credit Suisse, Morgan Stanley and Citi. With a value of €1,000 million and another €850 million of debt under management, Sabadell was committed to listing the company on the stock market this year. But according to El Confidencial, that decision could now be up in the air.

The bank chaired by Josep Oliu has been running the hotel chain for the last two years, under the leadership of Alejandro Hernández-Puértolas and Santiago Fisas. Its portfolio comprises around thirty hotels, including The Ritz-Carlton Abama and the Jardín Tropical, in Tenerife, and the recently inaugurated Hotel Axel, in Madrid.

A year ago, the subsidiary of Sabadell purchased three hotels in the Canary Islands from Grupo Lopesan, in a three-way operation with the construction company Sacyr and the island-based holding company.

Original story: Eje Prime

Translation: Carmel Drake