CBRE: New Homes Under Construction on the Costa del Sol Will Be Sold for c. €6,000/m2

18 February 2019 – Diario Sur

Six thousand euros or one million pesetas (…). That is what the buyers of the new single-family homes in Nueva Andalucía, in Marbella, can expect to pay per square metre. The real estate consultancy CB Richard Ellis has compiled a report about the characteristics of the new build developments that are being constructed on the Costa del Sol. And, the changing trend is reaching such an extreme that the analysts involved are talking about “a new building paradigm” in the residential market on the Costa del Sol, in this cycle of reactivation of the sector. The general conclusion is simple: better quality homes are being built, with more considered designs and common services, but also with much higher prices.

The document points out that in the past, the large number of transactions were sold for speculative purposes and, therefore, fundamental questions such as finishes, orientation, views and distribution were often neglected in the developments that were put on the market (…).

But times have changed. In this new cycle, property developers are taking care of their products and focusing their attention on clients with medium/high purchasing power and primarily those from overseas. It is not so much a question of location, be it in one specific municipality or another, but rather the quality of the product. (…). Now, most of the developers are backing more contemporaneous designs, with straight lines and large windows, with some of the best finishes in the market.

Change in model

“The reality is that during the last cycle, homes were built for the average market, but following the crisis years, almost everything is now being constructed to serve a niche in the market, of average-high purchasing power, which was previously unmet demand”, explains Andrés Moreno, Director of the Valuations Department at CBRE in Andalucía (…). “Now, much more care is being taken. Everything is designed with the final purchaser in mind (…)”.

The report highlights that the Costa del Sol is consolidating its position as an exclusive and luxurious destination. And that trend means that the newest flats are far from affordable for the general public (…).

In areas around Torremolinos, there are developments with sales prices of more than €4,000/m2, when the average for the area does not exceed €2,500/m2 for second-hand properties. In the Fuengirola/El Higuerón area, new build homes are being marketed for more than €4,000/m2. Prices amount to close to €3,000/m2 in La Cala de Mijas and rise to €6,000/m2 in Nueva Andalucía and Behahavís. The average budget of these clients ranges between €500,000 and €1 million.

Original story: Diario Sur (by Ignacio Lillo)

Translation: Carmel Drake

HI Partners Acquires 3 Hotels in Mallorca & Málaga

26 December 2017 – Ali Market

On 22 December, Spain’s National Securities and Exchange Commission (CNMV) reported that the US fund The Blackstone Group International Partners (through Halley Bidco, S.L.U.) had finally made effective the purchase of 100% of HI Partners Holdco Value Added from Banco Sabadell, in an operation worth €630.73M (…).

Hotel Investment Partners (HI Partners) divides its assets between two subsidiaries, HI Partners Holdco Value Added and HI Partners Holdco Gestión Activa. Value Added owns HI’s larger tourist accommodations, located in premium areas and capable of generating significant returns once converted. That division owns 15 tourist accommodation establishments (grouped into 14 complexes), which are integrated into various hotel groups through management and rental contracts, comprising 3,724 rooms in total.

Meanwhile, Gestión Activa (635 units spread over 11 establishments) owns the rest of the group’s assets, most of which are smaller properties, in secondary locations, with the aim of being sold after optimising their management. As at 25 December 2017, HI Partners owned a total portfolio of 4,359 accommodation units (beds) spread over 26 hotels, according to a Census performed by Alimarket Hoteles.

New additions

Blackstone’s aim over the next few years is to position HI Partners in the Spanish hotel sector and to continue adding new assets to its portfolio in order to make it one of the largest owners in the domestic hotel market. In this sense, HI Partners has just announced the purchase of three holiday resorts. Specifically, in the Balearic Islands, it has purchased ‘Calviá Dreams’ (4E-161 beds) and ‘Barracuda’ (3E-264 beds) in Magaluf (Mallorca) and in Torremolinos, it has acquired the Malagan aparthotel ‘Pueblo Camino Real’ (4E-513 beds).

The first two assets currently form part of the Alua Hotels & Resorts portfolio (a chain that is owned in its entirety by Alchemy) (…). In fact, and in its fight to grow its portfolio, Blackstone bid this year to acquire the Alua Hotels’ portfolio; however, the Socimi Hispania (the largest hotel owner in Spain, with 11,047 beds spread over 39 hotels) pipped the US fund at the post by acquiring a batch of 7 hotels linked to Alua for €165 million earlier this month (…).

Original story: Ali Market (by Ricardo Vallano)

Translation: Carmel Drake

RIU Seeks To Grow Its ‘Hotel Plaza’ Business Line

17 May 2017 – Expansión

RIU is on a roll. As it waits for the starting gun to fire on its Edificio España project in Madrid, the Mallorcan hotel chain is analysing other destinations in order to strengthen its Plaza business line, which is strategic for the group, whereby adding new locations to the Plaza brand.

The CEO of RIU and Head of Canary Islands, Morocco, Portugal and Cape Verde, Félix Casado, explained in an interview with Expansión that the group is considering destinations such as Barcelona, Paris and Rome to continue the business it started in 2010, when it opened its first RIU Plaza hotel in Panama. Since then, it has added another five Plaza branded establishments in Berlin, Dublin, Miami, Guadalajara and New York. But, for the time being, it does not have any in Spain. At the beginning of the year, the company announced its plans to team up with Baraka to manage and invest in the mega-hotel that the Murcian group is planning to open in Edificio España.

“We are very excited about the idea of handling this project in Madrid, in particular, in a building as iconic as Edificio España. The negotiations are not proving easy and now we have to wait for the purchase operation to be closed, which has been delayed for three months, before we can start construction”, said the Director. Casado said that his firm’s investment commitment with the Baraka Group “continues”, in line with expectations, with the aim of creating a joint venture to which the hotel chain will contribute 25% of the investment.

In terms of the possibility of undertaking a project on its own, in the event that Baraka does not manage to close the purchase within the scheduled timeframe – i.e. by June – Casado simply said that that option “is not envisaged”. And he added: “The other line would be a separate study that would have to be analysed from the point of view of the required investment and the return”.

Entry into China

Besides the urban business, the hotel group’s growth plan involves expanding into vacation destinations, both in America as well as in Asia.

The company, which operates in 19 countries with almost one hundred hotels, is considering entering China, starting out in cities such as Beijing and Shanghai. “We would be willing to invest in all of these destinations. RIU is going to attend the ITB Tourism Fair in China to consolidate its relations there and create new business opportunities”, said Casado.

In addition, RIU has not ruled out returning to Cuba, which it left in 2015, with the management of new hotels. “We are looking at various possibilities to return to Cuba. We have experience in that destination and if an opportunity arises that fits with out philosophy then we will explore it”.

Renovations

In addition, the hotel group is committed to repositioning its products through major renovation projects. Within the framework of this strategy, the Spanish group will spend €400 million this year on construction and renovations, of which almost €150 million will be spent on improving its hotel portfolio in Spain.

“We are diversifying the product and we are updating it, so as not to get left behind, with the aim of ensuring that our clients are happy, which is one of the priorities of RIU”, he said. Recently, RIU opened the doors to its Club Hotel RIU Costa del Sol in Torremolinos, after combining and renovating the RIU Belplaya and RIU Costa Lago hotels.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hotel Las Palomas Sold To Palia Hotels For €13.1M

18 April 2016 – Diario Sur

On Thursday, the iconic Las Palomas Hotel in Torremolinos was awarded in an auction to Palia Hotels, a Mallorcan chain that already runs another property on the Costa del Sol, the former Roc de Benalmádena Costa (now called Hotel Palia La Roca). The Balearic group has committed to pay €13,100,000 for the property and its main facilities with the aim of renovating them and reopening the hotel. The auction was conducted in person in the presence of a notary and was “very exciting”, according to the lawyer Ana Alonso, the bankruptcy administrator of the company that used to operate Las Palomas. “Four candidates were involved and the two highest offers were selected to participate in the final phase, and the bids then gradually increased”, she explained. It was such a close bid that the losing company, also Mallorcan based, offered €13,050,000.

Palia will now have to wait for a month for the acquisition deeds to be signed. If any problems arise with the buyer during that period, then the company that offered the second highest bid would have the opportunity to purchase the property. For Alonso, the result is definitely “good news”, given that the money obtained from the auction will be used to pay off the debts with the Tax Authorities, Social Security, the Town Hall of Torremolinos (which will receive €3.5 million for the IBI that the hotel owed and the profit from the sale) and the employees.

Yesterday, (the trade union) Comisiones Obreras expressed its satisfaction because “the almost 100 staff will receive their salaries and compensation payments” after four years of waiting. The total liabilities of the bankrupt company amount to around €15 million. Alonso said that every effort will be made to ensure that the ordinary creditors will also be repaid. However, the senior creditors will have to accept a discount of some kind for that to happen. “We were locked inside the hotel around the clock between June 2012 and June 2015. Our only aim was to keep our jobs and prevent the terrible management of the Puche family from dragging the workers and the hotel into ruin”, said José Quintana, member of the company’s Board.

The buyer will have to invest between €3 million and €6 million on the renovation work before it reopens the hotel, according to Ana Alonso. The four-star Las Palomas Hotel filed for bankruptcy in 2011 and for liquidation in April 2013.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake

Shareholders Expected To Approve Intu’s Purchase Of Land In Malaga

6 March 2015 – Expansión

The British property developer has called a shareholders’ meeting to approve (its construction of) one of the largest shopping and leisure complexes in Spain.

The company that owns Puerto Venecia in Zaragoza (pictured above) and Parque Principado in Asturias is going to construct its third shopping centre in Spain, if its shareholders approve the plans at their meeting on 15 April.

In a statement issued yesterday (Thursday) to the London Stock Exchange, Intu Properties announced its decision to exercise a call option to purchase 30 hectares of land close to Torremolinos (Málaga) for €37.5 million. The company has already invested €4.2 million preparing for the project and it may also buy another adjacent site for €4.8 million.

The vendor of the land in Málaga is the Peel Group, a company that holds a stake in Intu, and so the other shareholders should authorise the transaction at their meeting. Moreover, Peel has committed to investing the money it receives from the sale of the site in Málaga into shares in the company, which is listed in London.

If the agreement is approved, Intu will invest €450 million in the development of a new shopping centre between 2015 and 2018. Its objective is to obtain an annual return of 7% on this investment from the rental of shops and restaurants in the complex. Intu plans to look for partners to buy shares in the development company that will build the centre.

In addition to its shopping centres in Zaragoza and Asturias, and its project in Málaga, the Intu group is planning other developments in Valencia, Vigo and Palma de Mallorca. Intu’s share price rose by 1.1% in trading on the London Stock Exchange on Thursday.

Original story: Expansión (by R. Casado)

Translation: Carmel Drake

Intu Will Invest €425m In Its Shopping Centre In Málaga

2 March 2015 – Expansión

The British company Intu Properties confirmed yesterday that it plans to invest €425 million in the construction of a new shopping centre in Málaga, as part of its plan to create a large network of leisure and retail complexes in Spain.

In March, as a preliminary step, the group is going to ask its shareholders to approve the purchase of land close to Torremolinos for €42.1 million, where it will build the centre, which will have a gross leasable area of 175,000 square metres. The shopping centre is expected to open in 2018.

Since 2013, Intu has acquired two operational shopping centres in Spain: Parque Principado (in which the Canadian fund CPPIB holds a 50% stake) in Asturias, for €162 million and Puerto Venecia, in Zaragoza, for €451 million.

As well as the project in Málaga, the company is also considering developing centres in Valencia, Vigo and Palma de Mallorca. It expects to make its largest investment in the Oceania de Valencia complex, which could amount to €750 million.

In its results for 2014, Intu increased the valuation of its 50% stake in Parque Principiado from €81 million to €106 million. The firm is now looking for a financial partner for Puerto Venecia.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake