Pierre & Vacances to Increase Revenues in Spain by 50% in 3 Years

28 November 2018 – Expansión

Pierre & Vacances, the vacation apartment, hotel and resort chain, wants to strengthen its presence in Spain with a growth plan over three years, which will allow it to achieve 80 establishments in Spain and Portugal and increase is turnover in the region by more than 50% to around €100 million by the end of 2021, compared to its forecast revenues of €65 million for 2018 and €85 million for 2019.

The French company, which has added six new establishments to its portfolio this year, will add another three properties next year, taking the total to 59 complexes and 5,000 apartments by the end of 2019.

Its plans for 2021 include having 80 tourist complexes in Spain and Portugal, containing between 6,000 and 6,500 units, according to Ghislain d’Auvigny, Director General of Pierre & Vacances in Spain, talking to Expansión.

One of the most recent openings includes Madrid, where the company has just incorporated apartments in the Eurobuilding 2, a building with 123 apartments at number 69 Calle Orense. This represents Pierre & Vacances’s debut in the Spanish capital and it joins other urban complexes that the company already has in Sevilla and Barcelona.

Pierre & Vacances, which arrived in Spain in 2005, employs around 1,200 workers in the country during the high season. “We will continue to take advantage of opportunities and to reach agreements with owners for the management, rental and marketing of complexes”, said D’Auvigny.

In parallel, the company is going to take advantage of purchase opportunities if it finds the appropriate assets, although it will subsequently sell them to third parties, be they funds or individuals, to maintain its policy of not owning any assets itself.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Town Hall of Málaga Authorises Four Buildings for Tourist Apartments

16 October 2018 – Diario Sur

The boom in projects to build new tourist apartments in the Málagan capital continues apace. That is reflected in the list of activities that received building permits from the Municipal Urban Planning Department during the months of July, August and September, which will be submitted to the governing board of that Town Hall body tomorrow. The projects include four properties for tourist apartments, of which two involve the adaptation of existing buildings, and the other two the construction of new properties on separate plots, located in the Trinidad neighbourhood.

One of the authorised projects involves the construction of a building for 49 tourist apartments, 26 parking spaces and a swimming pool on the plot located at numbers 7, 8 and 9 Avenida de Fátima, located right next to the parish of the same name. It is being promoted by the company Pinar Concept. Similarly, around 200 m from that site, also in the Trinidad area, the Town Hall has granted a construction licence for another tourist apartment building, to be promoted by Inmoplan Promociones, which will be constructed on the plot at numbers 5 and 6, Plaza de Nuestra Señora de la Soledad, next to c/Don Juan de Austria.

The other two approved initiatives involve the conversion into tourist apartments of two residential-use buildings located at number 52 Calle Mariano de Cavia, in the Pedregalejo area, on the one hand, and at number 2 Calle Barroso, next to Calle Córdoba, on the other. As this newspaper already reported (refer to SUR18/9/2018), behind this latest activity in the Soho area is the chain Hotusa, which is planning to develop a project involving 42 tourist apartments through the company Tandem Apartments.

Student halls

On the other hand, on another plot of land in Trinidad, located at numbers 8 and 10 Calle Carril, the Urban Planning Department has approved the construction of a hall of residence for students promoted by the company specialising in internships for overseas students, Euromind Projects.

In addition, the Urban Planning Department plans to approve tomorrow the start of the procedure to declare the expiration of the permit that was granted in 2008 for the construction of an industrial, office and parking lot building at number 303 Avenida de Velázquez, next to the headquarters of Canal Sur. That project was started but only the structure was completed. In a letter to Aena in July, it was stated that in 2009, the obligations of the airport were modified and so currently its height represents “an obstacle” for manoeuvres for the approach and take off of planes from the runway.

Original story: Diario Sur (by Jesús Hinojosa)

Translation: Carmel Drake

Beds for Tourists on Costa del Sol Grew by Almost 20% during YTD August

10 October 2018 – Diario Sur

At a time when international tourism demand is cooling, the supply of beds in regulated tourist accommodation, in other words, in hotels, apartments, campsites, country houses and tourists apartments, grew by almost 20%  in Málaga during the 8 months to August, according to a report about the Tourist Situation on the Costa del Sol. Behind this significant increase is the boost from holiday rental homes, which caused the volume of establishments to skyrocket by almost 50% during the first eight months of the year. In other words, during this period, 9,500 new businesses to house tourists have been put on the market, which have added 52,431 beds so far this year. With this rise, the Costa del Sol now has the capacity to accommodate 321,374 visitors each day, whilst in August 2017, that figure amounted to 291,000.

These figures warn of a greater dynamism in the registration of properties destined to travellers during the peak months of the summer. And a report compiled by Costa del Sol Tourism about the evolution of the supply of accommodation in that destination shows that during the six months to June, the number of beds grew by 10% and the number of businesses grew by 25%. The destination ended the first half of the year with a supply of 26,424 tourist establishments with the capacity to house 308,288 visitors. Sources at Costa del Sol Tourism highlight that, during that period, the highest growth in beds was seen in rental homes dedicated to tourists, which saw an increase of 26,154 beds to reach a total of 112,294, up by 30.4%. They were followed by rural houses, with 1,744 new beds taking the total supply to 12,952, up by 15.6%; and apartments, with 1,002 new beds out of a total of 58,670 on offer, up by 2%.

The boom in holiday rentals has resulted in a complete transformation of the supply of accommodation along the Costa del Sol, in such a way that, nowadays, tourist homes account for the highest volume of beds, followed by hotels and apartments, accounting for 36.4%, 29.5% and 19%, respectively. The Director-General of Costa del Sol Tourism, Arturo Bernal, highlighted that holiday rentals “are a reality of the tourist sector that we must strengthen ties with”, urging people to work towards full regulation of the whole accommodation supply and to offer high-quality accommodation.

Original story: Diario Sur (by Pilar Martínez)

Translation: Carmel Drake

STR & Magma HC: Hotel Investment Continues to Rise in Spain

2 August 2018 – Hosteltur

The Spanish hotel industry has increased its interest in investment due to the strong growth in yields in several markets, and despite the fact that the political scenario in Cataluña has slowed down the performance of the country as a whole. That is according to analysts from STR and Magma HC, who explain that the investment boost has been largely driven by the strength of international demand, even during the financial crisis.

“The increase in holiday tourism, as well as in ‘bleisure’ (business with leisure tourism) has opened the market to numerous development opportunities, with several operators currently working on improving their products and services to satisfy the growing demand”, says Albert Grau, founding partner at Magma HC. Thus, in his words, the Spanish hotel sector “is continuing to boom, despite the challenges ahead”.

In this sense, it is worth remembering that, between March 2015 and March 2018, Spain registered 37 consecutive months of RevPAR (revenue per available room) growth. In recent months, by contrast, there have been marginal decreases, above all due to the slow down in Barcelona, which is home to the largest number of rooms in the country. Even so, according to data from STR, in most of the key domestic markets, including in Madrid, hotel yields are continuing their strong upwards trend.

“Vacation markets, primarily Gran Canaria, have experienced YoY decreases because tourist demand has returned to rival destinations such as Turkey and Egypt”, says Javier Serrano, manager at STR for Spain.

Barcelona

STR’s study shows that, in general, hotels in the Catalan capital have managed to keep their tariffs more or less stable, although there have been more notable decreases in recent times. Following the independence referendum last October, the occupancy rate of establishments in Barcelona fell considerably. During the first half of 2018, they fell by 5.2% with respect to the same period a year earlier, whilst the ADR (average daily rate) fell by 1.4% compared to 2017.

“Although it is still too early to make any kind of prediction about what will happen in the market in the end, it is likely that Barcelona will recover quickly once the situation stabilises”, says Serrano. “Hotels in Barcelona”, he adds “saw constant monthly RevPAR growth rates in the double digits in 2016 and 2017, when the market was still benefitting from strong international demand and demand diverted from destinations such as Turkey and the north of Africa. The recent instability in Barcelona slowed down those previous growth rates, with decreases in occupancy rates driven by the decrease in domestic and international demand, mainly from the USA. Nevertheless, if the market manages to keep tariffs stable, we should see growth to the extent that consumer confidence returns to Barcelona”.

Madrid

Madrid, with the highest RevPAR growth rate in all of Spain in 2017, has benefitted over the last three years from demand due to leisure and corporate business. As well as being one of the main weekend destinations for Europeans, it has also seen an increase in interest from several Asian countries and the USA, especially when it comes to group reservations (…).

The Director-General of STR, Robin Rossman, believes that “there is enormous potential for Madrid’s hotels to continue pushing up rates”. In his opinion, “to the extent that demand continues to grow and the hotel supply market continues to evolve with the arrival of more high-end properties, we can expect to see increases in the ADR”.

Overall, the analysts at STR expect that corporate demand in Madrid will continue to increase thanks to the celebration of international events and the relocation of the headquarters of several companies from Barcelona to the Spanish capital. As such, they forecast ADR growth of close to 3% in Madrid by the end of 2018.

Original story: Hosteltur

Translation: Carmel Drake

Chinese Group Gaw Capital Joins Forces with Alicia Koplowitz to Target Hotel Sector

25 July 2018 – Expansión

The Chinese fund manager Gaw Capital Partners is making its debut in the Spanish hotel sector hand in hand with Omega Capital, the family office owned by Alicia Koplowitz. Specifically, the investment firm specialising in real estate assets has purchased 50% of the Hospes Hotel Group, worth €125 million, and has created a joint venture together with Omega Capital – with which it will share the ownership – for the development and expansion of the Spanish chain.

Before the entry of Gaw Capital Partners, the hotel chain was owned in equal parts by Fonsagrada – a company owned by the Koplowitz family -; the Areyhold group, owned by the Yera family; and Telescom, owned by the Hernández López family.

Hospes, founded in 2010, owns nine boutique hotels located in Alicante, Cáceres, Córdoba, Granada, Madrid, Mallorca, Salamanca, Sevilla and Valencia. The company’s establishments, which are all four- and five-star properties, are located in unique buildings that are rich with historical and architectural heritage.

According to the results for 2016 (the latest available in the Mercantile Registry), the chain generated an operating profit of €10.5 million, up by 18% compared to the previous year, and sales of €30 million.

Growth in Europe

The purchase of 50% of Hospes by the Chinese fund has been carried out through the fund European Hospitality Fund I, managed by GCP Hospitality, its hotel division.

GCP Hospitality, founded by the shareholders of Gaw Capital Partners and by Christophe Vielle in 2008, currently manages 39 assets (hotels, apartments and university campuses) and 7,450 rooms around the world.

GCP Hospitality, led by Vielle, has regional offices in Bangkok (Thailand), Beijing (China), Hong Kong (China), Perth (Australia), San Francisco (USA), Singapore and Rangoon (Myanmar).

Vielle, CEO of GCP Hospitality Management, explains to Expansión that, with the good outlook for the European tourism industry, the company is “actively” studying ways of expanding its portfolio across the Old Continent.

“We will take advantage of the reputation of the Hospes Hotel Group and our international network to raise the profile of the brand”, says the CEO GCP Hospitality Management.

In this sense, the evolution of the Spanish tourism sector in recent years has been spectacular. Spain recorded a new milestone last year with the arrival of 82 million international tourists and has also registered eight consecutive years of growth in terms of tourism GDP. For Vielle, the acquisition of Hospes Hotel Group is an example of the “solid track record” of GCP Hospitality in the launch and management of successful hotels and first-rate brands.

Since its creation in 2005, Gaw Capital Partners has raised almost USD 10 billion (€8.557 billion) and currently has USD 18 billion (€15.403 billion) in assets under management. The fund manager, which is investing in different segments of the real estate market, has a significant presence in the Asia Pacific region and in the USA.

Promoting the brand

Meanwhile, the alliance with the Chinese investment fund manager allows Omega Capital to boost its investments in the tourism sector.

Hospes is not the only firm that Koplowitz is backing in the hotel sector through her family office. Specifically, Omega Capital, together with the Orient Express group (now Belmond) purchased the Madrilenian Hotel Ritz for €125 million in 2003. More than a decade later, in 2015, Omega Capital and Belmond sold that iconic hotel to a consortium formed by the Olayan family, from Saudi Arabia, and the Mandarin group, which manages the establishment, for €132 million. The property is currently closed for refurbishment.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deloitte: 173 New Hotels will Open in Spain Between Now and 2021

9 June 2018 – Expansión

The tourist boom and interest in the real estate sector have boosted the hotel segment. So far this year, operations amounting to €2.4 billion have been closed and an acceleration is forecast for the coming months.

Spanish hotels are standing out as one of the most sought-after assets for investors in the real estate market. The tourism boom in Spain, which recorded its fifth consecutive record year in 2017 with the arrival of 82 million international visitors, coupled with the property boom, caused hotel investment to reach maximums in 2017 of almost €3.1 billion. Moreover, the commitment from investors to these assets will allow that figure to double this year.

According to data from the Hotel Property Handbook, compiled by Deloitte, to which Expansión has had access, €3.1 billion was transacted in the segment last year, which represents an increase of 44% YoY and accounts for 22% of all the investment activity undertaken in Europe, placing Spain at the head of the investment ranking behind only the United Kingdom, which accounted for 29%.

During the first five months of this year, more than €2.4 billion has been invested, which will be added to operations currently under negotiation amounting to around €4.2 billion, which are expected to close over the coming months, according to the study.

“So far this year, we have transacted an investment volume almost as high as that signed during the whole of last year. The private equity funds are proving to be the main stars of the activity, which may even double the figure recorded in 2017”, said Javier García-Mateo, Partner at Deloitte Financial Advisory.

Loans

That is in addition to the strong appetite from traditional Spanish credit institutions to finance hotel properties, due to the momentum of the sector. Their financing spans projects under development, including remodellings, repositionings and developments. In this sense, the most active banks in terms of senior lines of credit for these assets are CaixaBank, Santander and Sabadell.

Investors are betting on mega-operations and the creation of large portfolios, which will allow them to have a diversified business and gain bargaining power over tour operators.

This trend comes in addition to the interest from Asian players in hoisting their flags in Spain. For example, the emergence of the Thai group Minor in NH Hotel Group, which has reached an agreement to purchase HNA’s stake in the Spanish hotel chain and is studying a takeover bid for 100% of the company.

In this context, the large hotel groups have taken advantage of the boom years to invest in improvements in their asset portfolios although there is still a long way to go. The opening and renovation of hotels consolidated itself in 2017, with activity involving 74 hotels and 12,500 rooms, reaching cruising speed following a significant recovery in 2015 and 2016, with projects in 120 hotels and almost 17,300 rooms.

Over the next five years, investment in work to adapt the hotel stock is expected to amount to €2.2 billion.

According to the report, 65% of the hotel stock in Spain is obsolete, with an average age of more than nine years, which makes investment in capex the main priority if operators are to handle the competitive pressures and achieve better margins.

“The strong growth in tourism in Spain contrasts with average rates that are still excessively low in the holiday segment. The renovation of obsolete projects, combined with the arrival of international operators, will allow the repositioning of an offer that ought to compete on quality rather than quantity”, explains Viviana Otero, from Deloitte Financial Advisory.

By region, the Canarian archipelago, Andalucía and the Balearic Islands are the regions that require the greatest capex spending, accounting for almost 68% of the total.

This effort has contributed to an improvement in the main performance ratios of hotels. According to Deloitte, revenues per available room (RevPAR), one of the main profitability indicators, grew by 10% last year.

New openings

The strong performance of the sector also accounts for the new promotions and project renovations underway. Over the next four years, 173 hotels are expected to be opened in Spain containing almost 30,000 rooms. “53% of those will be new projects and 47% will be renovations. It is worth highlighting the importance that rebranding is gaining as a defensive strategy against the alternative destinations of Greece, Turkey and Croatia, said Patricia Plana from Deloitte Financial Advisory.

In terms of challenges facing the sector, the report highlights the saturation of certain destinations in the summer and the problems of co-existence alongside local residents in those regions, as well as the recovery of competitor countries in Southern Europe and the rise of holiday rentals boosted by collaborative economy platforms such as Airbnb.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

INE: Foreign Visitors to Spain Rose by 6% in Q1

4 May 2018 – Eje Prime

Tourism in Spain is on a roll. During the first quarter of 2018, 13.7 million overseas visitors came to Spain, up by 6% compared to the same period in the previous year, according to data from the Statistics of Tourist Movements across Borders (Frontur), compiled by Spain’s National Institute of Statistics (INE).

By country of origin, the British were once again the most prevalent tourists in the country between January and March, with 2.9 million visitors of that nationality. They were followed by German visitors, with 1.9 million people. The number of French tourists, the third most frequent visitor group, amounted to 1.7 million people.

The Canary Islands accounted for most of the international tourist visitors to Spain during the first three months of the year, with more than 3.7 million visitors, becoming the autonomous region of choice. Meanwhile, 3.1 million foreigners arrived in Cataluña, and Andalucía was the region that completed the Top 3 most visited during the period, with 1.9 million tourists.

In March alone, the arrival of overseas visitors to the country gained momentum with an increase of 9.6% with respect to the same month last year, to 5.4 million people. This increase contrasts with the rises recorded in January and February, which amounted to 5.2% and 2.6%, respectively.

Original story: Eje Prime

Translation: Carmel Drake

Socimi Elaia Buys Former Staff Residence from BBVA for Hotel Conversion

12 February 2018 – Idealista

Real estate investment companies are continuing to star in real estate operations in Spain. On this occasion, the protagonist has been one of the latest companies to have debuted on the stock market: Elaia Investment Spain.

That vehicle, controlled by the Ruggieri family, one of the most wealthy in France, started trading its shares in October with a market value of €120 million. It specialises in assets linked to tourism and holds residential buildings, tourist apartments and hotels in its portfolio.

And it is in that sector that the Socimi plans to continue investing. On 7 February, it reached an agreement with BBVA to purchase the entity’s former employee residence in the town of Alfaz del Pi, in the province of Alicante.

The operation has been signed for €8.7 million and allows the Socimi to add more assets to its portfolio. The property has 140 rooms and spans a constructed surface area of more than 12,000 m2, located on a plot measuring 30,000 m2.

In this way, the complex has a large garden area, swimming pool, solarium, parking, tennis and frontón court, as well as a Social Club measuring almost 350 m2. With these facilities and its good location already in the bag (the residence is located just 200 metres away from the Playa del Albir, one of the most touristy municipalities in the Costa Blanca), the aim of the Socimi is to convert the property into a hotel complex.

According to confirmation provided by the French-controlled company to the Alternative Investment Market (MAB), the Socimi is in the process of marketing the property for its lease and the refurbishment work is in the process of being prepared.

According to explanations given by Manuel Climent, Director of transactions at JLL Hotels & Hospitality Group, who has acted as the advisor to the selling bank, “this operation confirms the interest from international investors in Spain and more specifically in holiday destinations. In 2017, more than 62% of the total transacted volume in holiday locations involved operations whose buyers were international. We expect this trend to continue during 2018, taking into account the strong operating results in the market and the growth forecasts”.

Original story: Idealista

Translation: Carmel Drake

Spain Overtakes US to Become 2nd Most-Visited Country in the World

12 January 2018 – El País

Spain’s tourism sector is on a roll, and it looks like the good times will continue into 2018.

Last year, industry activity grew by 4.4% on the back of historic highs, both in terms of international visitors and tourist spending. This year, the business lobby Alliance for Excellence in Tourism (Exceltur) is expecting a further rise of 3.3%.

This industry leader has also estimated the impact of the Catalan crisis on tourism to be in the range of €319 million. If the crisis were to persist, the growth forecast for 2018 would shrink to 2.8%

Even though the secessionist bid shaved three-tenths of a percentage point from tourism activity in 2017, it was still a record year for Spain: over 82 million international visitors, an 8.9% leap from 2016, and a 1.5% increase in average spending per tourist, according to tourism ministry estimates released this week.

This makes Spain the world’s second-most popular tourist destination, behind France and ahead of the United States.

The tourism industry’s share of GDP has increased to 11.5%, representing €134 billion. And industry growth resulted in 77,501 new jobs in 2017, said Exceltur.

Political instability in the last quarter of the year, following the illegal independence referendum of October 1, negatively affected international tourism, particularly in geographically close markets like France, where visitor numbers were down 19.7% year on year in the October–November period. German visitor numbers fell 14% and the UK’s retreated 8%. Asian markets sent fewer visitors as well. However, tourists from the Americas grew notably in number, particularly those from Argentina (a 74% rise) and the United States (18.2%).

Slower growth in 2018

Exceltur said that 2018 “will be another excellent year” and predicted 3.3% growth for the tourism sector, higher than the forecast for the Spanish economy as a whole but lower than in the last two years – and that is without factoring in the potential effects of a protracted crisis in Cataluña.

The lower growth figure can be partially explained by a gradual recovery of alternative destinations that compete directly with Spain, such as Turkey, where terrorist attacks have driven tourism down.

“The challenge for the tourism industry now is to ensure sustainable growth with a view to the future,” said José Luis Zoreda, executive vice-president of Exceltur, at a news conference.

Despite the optimistic forecast, Exceltur is warning about a drop in revenues in early 2018: 10% for hotels, 6.8% for car rental companies, and 3.5% for transportation firms. The business association said “there will be staff adjustments” to make up for these losses.

Original story: El País (by Nahiara S. Alonso)

Edited by: Carmel Drake

Mazabi Acquires the ‘Dávila’ Office Building in Santander

22 January 2018 – Press Release

Mazabi Gestión de Patrimonios is continuing to invest in the office segment with the acquisition of Edificio Dávila.

The building is located on General Dávila, 87, in the city of Santander (Cantabria), and has a surface area of 9,585 m2. The property is located in the centre of the Cantabrian capital, approximately 1km away from the Town Hall, and is surrounded by green spaces and public areas in the upper district of the city. It is well connected and has 126 private parking spaces. Constructed in 2013 in a modern and contemporaneous style, the building is characterised by its glass façade and regular shaped floors, with wonderful natural light and views from its upper levels.

The offices are currently leased in their entirety to the Government of Cantabria under an initial 35-year contract and over a concession period of 52 years. They house a number of the regional Government’s social and IT services.

Mazabi manages assets worth more than €1 billion and has investments in 14 countries. With a team of 22 professionals located in Madrid, Bilbao and Málaga, Mazabi considers that investment in Spain continues to be attractive due to the on-going economic growth and the historical influx of tourism (…).

Original story: Press Release

Translation: Carmel Drake