Blackstone Negotiates Purchase of Grupo Alua’s Hotels

18 December 2017 – Expansión

The US investment fund Blackstone wants to strengthen its position in the hotel segment in Spain. After acquiring Sabadell’s hotel portfolio in October for €630 million, Blackstone is now analysing the acquisition of the hotel portfolio owned by Alua Hotels & Resorts to strengthen its presence in the market.

Sources in the sector explain to Expansión that the US fund has been negotiating with the owners of Alua for several months regarding the operation and, although it is not the only player bidding for its portfolio, it is one of the best positioned to close the deal. The portfolio owned by Alua Hotels & Resorts currently includes seven hotels with more than 1,700 rooms located in different parts of the Balearic and Canary Islands.

Specifically, Alua owns four establishments in Palma de Mallorca: the AlauSoul Palma, with 120 rooms; the AluaSoul Mallorca Resort, with 371 rooms; the AluaSoul Alcudia Bay, with 171 rooms; and the AluaSun Torrenova, with 256 rooms.

Management agreement

In addition, it owns the AluaSoul (in Ibiza), with 290 rooms; the Hotel Parque San Antonio (in Tenerife), with 252 rooms; and the Hotel Ambar Beach, (in Fuerteventura) with 244 rooms.

Alua Hotels & Resorts –previously known as Feel Hotels Group– was created in 2015, inspired by the European private equity firm Alchemy Special Opportunities and by Javier Águila, former Director of Orizonia, following the purchase of six hotels, with more than 1,200 rooms, in Mallorca and Ibiza. The portfolio used to be owned by Marina Hotels (…).

Moreover, Alua Hotels & Resorts manages five Intertur Hotels acquired in May 2017 by KKR and Dunas Capital. Those establishments, which comprise 1,120 rooms in Mallorca and Ibiza, were worth just over €120 million.

The agreement reached between KKR, Dunas Capital and Alua Hotels & Resorts considered the repositioning and modernisation of the five establishments and the management of the hotels by Alua following the entry into force of the agreement and their marketing under its brand in 2018.

Alua Hotels & Resorts, which last year recorded turnover of €28 million, has more than 1,200 employees.

Record investment

The tourism boom in Spain, the appetite for real estate and the liquidity in the market are continuing to encourage hotel investment, which may reach €3 billion by the end of the year; that would represent a new record for this segment (…).

Moreover, if these negotiations prove successful, the operation would allow Blackstone to shore up its position in Spain. The US fund has become one of the stars of the real estate sector this year, having closed some of the most high-profile transactions in recent months (…).

Of the (14) hotels that Blackstone purchased from Sabadell, six are located in the Canary Islands (two in Tenerife and four in Gran Canaria) and the rest are located in Cataluña (in Sitges and Roses), the Community of Valencia (in Benidorm and Valencia), Málaga (two) and another two in Mallorca and Madrid (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Deloitte Integrates Boutique Consultancy Firm ‘Planet Hotels’

10 October 2017 – Expansión

The professional services firm Deloitte is consolidating its presence in the market for hotel transaction advice with the incorporation into the group of the boutique consultancy firm ‘Planet Hotels’. In this way, it is taking advantage of the good times that the tourist sector is enjoying; it has seen record numbers of international visitors for the last eight years and investor appetite for these assets continues.

The Planet Hotels team joining Deloitte is led by África Palau (pictured above, centre) and Marc Molas (pictured above, right), and has more than 15 years experience in the tourism and hotel sectors. Specifically, this boutique consultancy firm specialises in hotel transactions; searching for hotel operators for hotel owners; and managing hotel assets. The employees of Planet Hotels will be integrated into Deloitte’s Financial Advisory team, comprising 500 professionals, more than 30 partners and with a presence in 20 offices all over Spain.

The area is divided into two main blocks, one specialising in mergers and acquisitions (M&A) and the other providing services for crisis situations. Similarly, this division renders its services with an approach of specialising by industry, with the objective of providing advice that reflects sector reality and the needs of its clients.

In terms of the professional profile of the new joiners, Palau holds a degree in Economics and Business and has completed a Corporate Finance training program at the Instituto de Empresa. She has 29 years of experience as a senior manager of hotel companies and in processes involving investment and divestment operations, as well as advising on contracts for the leasing, management and franchising of hotel projects.

Meanwhile, Molas holds a degree in Economics and has 15 years of experience advising on investment and divestment transactions in the hotel sector. Molas has also led hotel projects in Spain, Eastern Europe, South America, Central America and the Middle East.

Some of the major corporate operations advised by the new team to join Deloitte include the sales of Hotel Leonardo Gran Atlanta (Madrid), Hotel Ilunion Málaga (Málaga), Hotel Barceló Lanzarote (Lanzarote) and Hotel Pestana Barcelona, as well as the search for and selection of operators for Hotel Vincci Mercat (Valencia) and Hotel Ilunion Bilbao (Bilbao). They also led the search for a franchise agreement for Hotel BW Urdanibia Park (Irún).

Investment

The tourist boom and upturn in the real estate sector have facilitated record years of asset purchases in Spain. Last year, investment in the hotel segment amounted to €2,145 million, up by 17%, according to Deloitte España’s Hotel Property Handbook. This year, investment volumes are also expected to exceed €2,000 million.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Hotel Investment Is Thriving In Valencia & Alicante

2 December 2016 – Levante-EMV

Hotel investment has increased by 162% and profitability has soared by 17.5% in Valencia and by 27.5% in Alicante, driven by the tourist boom. According to sources in the hotel and real estate sector, the owners of buildings are aware of the increase in investor demand; and offers for buildings up for sale and rent in Valencia have multiplied. Specifically, three properties in iconic locations have come onto the market in recent weeks for €15 million and another three have been put up for rent. Several operations have also been signed, including the Valencian chain Casual Hotel’s purchase of the former Hotel Londres in the Plaza del Ayuntamiento for €6 million and the acquisition by the chain Myr of the Café Madrid building, in an operation amounting to €12 million.

According to the consultancy firm CBRE, the increase in the number of operations is due to “strong demand from investors to buy and capitalise hotel assets, and benefit from the clear recovery in the real estate sector in Spain and the strengthening of the economy, which is expected record GDP growth of 3.1% this year. Moreover, international tourism in Spain is expected to exceed the 70 million visitor threshold for the first time this year”.

Sources in the sector explained that one of the properties that has been put up for sale (for €6 million) is on one of the streets adjacent to the Plaza del Ayuntamiento; another, located on Calle Ballesteros is on the market for €3.5 million; and another one, next to the Palacio del Marqués de Dos Aguas, is up for sale for €9 million. In addition, the German property developer Ratisbona (linked to the Vice-President of Bayern de Munich, Rudolf Schels) has acquired an office building on Calle María Cristina (next to the Plaza del Ayuntamiento) for €3 million, which it plans to convert into a hotel.

Above all, hotel operators are interested in leasing properties as an alternative to buying them. Real estate sources state that there are three high-profile projects in the rental market at the moment: the property at number 1 on Calle Colón; the former headquarters of CAM on the corner of Pascual y Genís with Martín Cubelles; and the former Telefónica building on Calle Isabela Católica.

The building on Calle Colón 1 was the former headquarters of the Social Security agency. The Dénia-based property developer Enrique Pla and the Valencian-based businessman Enrique Ballester acquired the nine-storey property for €14.2 million a year ago and sold the lower three floors in the summer for €20 million (where a Pull and Bear store is due to be opened). The two businessmen have now decided to generate returns from the rest of the building and are converting it into a hotel with the aim of leasing it to a chain.

The former headquarters of the CAM is an office building belonging to employees of Banco Sabadell through their pension fund. The same real estate sources said that the building is not up for sale, but that the owners are looking for a hotel operator who may be interested in operating it (amongst other options). (…).

The former Iberdrola building on Calle Isabela Católica has been closed for years and its owners are also trying to turn it into a hotel. Iberdrola sold the building to a group of local real estate companies led by Gesfesa for €24 million before the collapse of the real estate market.

Original story: Levante-EMV (by Ramón Ferrando)

Translation: Carmel Drake