Cerquia’s Directors Launch New Hotel Development Company: Xpandia

14 February 2018 – Eje Prime

The managers of Cerquia have set their sights on achieving five stars. Carlos Cercadillo, Javier Pérez Picallo and Jesús Salinero, all senior members of the Spanish company, have teamed up with a group of investors to leap into the hotel sector. The executives have launched Xpandia Projects, a company specialising in hotel development with a focus on Spain and Portugal, according to Pérez Picallo, CEO of Cerquia, speaking to Eje Prime.

Picallo will be in charge of the new project, although he will also continue in his position at Cerquia, as will Cercadillo, who is the President of the company and Salinero, who leads the expansion department.

“The hotels will be urban properties and they will be handed over turnkey-style to the operators”, explains the CEO of the company (…). The objective of the property developer is to hand over 800 rooms over the next three years. For the time being, the company is going to work on three projects, two in Lisbon and one in Valencia. The latter, located on Calle Guillem de Gastro, is on the verge of being granted its licence, with the aim of being completed and ready for delivery in 2020. In the case of the Portuguese assets, the delivery will take place in 2018 and 2019, respectively. In total, these three hotels will place 386 rooms on the market. Some of the major operators for which the firm is going to work include groups such as Accor, Iberostar, Hotusa, Vincci and B&B.

The development of the assets will be undertaken through both the renovation of buildings, as well as the construction of new build properties. The first project in Valencia and one of the projects in Lisbon involve the complete renovation of two properties. In addition, during this first phase, the company has pre-agreements to develop hotels in Madrid, Valencia, Alicante, Sevilla, Málaga, Bilbao and Donostia.

Xpandia is not planning to accumulate assets itself. “We will not hold onto the assets, instead we will sell them to investors who will operate them after we complete the building work”, explains Picallo, adding that “in some cases, we will hand over the hotels completely decorated and furnished”. The only hotel that the new company will own is a property in Lisbon, currently owned by Cerquia, which will be transferred from one portfolio to another. Despite the obvious synergies between the group and the property developer, “this is a project that will operate outside of Cerquia”, said its CEO.

The property developer will work on all stages of the projects from the location and selection of the properties to the drafting of the technical plans and the organisation of the construction work. Location wise, the properties will always “be in cities, primarily in central areas, to respond to the tourist interest that operators demand”, says Picallo. The property developer will study 100 potential projects per year.

The company is not going to work in Barcelona for the time being. Although the Catalan capital is the most touristic city in Spain, the property developer considers that “there is too much uncertainty around obtaining hotel licences in the city” (…).

During this first phase, the hotel operators that Xpandia is working with are expected to invest around €30 million. The hotels that the company is going to develop will be 3- and 4-star properties.

The group driving the project, Cerquia, is a company dedicated to the management and operation of its own real estate assets. The company, created in 2006, has offices, hotels and homes for rent in a portfolio that spans a surface area of approximately 20,000 m2 in the office sector alone across the Iberian Peninsula.

The firm’s clients include companies such as Banco Santander, Uria Menéndez, Garrigues, Catalana Occidente, Hoteles Vincci,  Bausch & Lomb, Intermoney, Worx, Lycamobile and Shine Ibérica, amongst others. For 2018, the group’s roadmap is to maintain its activity and continue with the progress of its three residential developments.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Hispania Invests €190M To Reposition Its Hotel Portfolio

25 September 2017 – Expansión

Hispania is going to invest €190 million to reposition its hotel portfolio between now and 2019 to maximise its value. At the end of the first half of the year, the Socimi managed by Azora owned a portfolio of 39 hotels and 11,059 rooms, most of which are located in the Canary Islands.

Some of the most strategic hotels, according to the presentation to investors submitted by Hispania to the CNMV on Friday, include the Hotel Club San Miguel (Ibiza), on which it is going to spend capex of €50 million; and the Hotel Holiday Inn in Madrid, acquired in 2015 and in whose modernisation, the Socimi is going to invest €34 million. In parallel, Hispania has another €100 million of capex budgeted for other potential projects.

In addition to the investment in the modernisation and repositioning of the establishments in its portfolio to superior categories, Hispania is basing its model on a diversified portfolio of operators – it works with Barceló, Meliá, NH and Vincci, amongst other hotel chains – and it has lease contracts that combine fixed and variable components. Its roadmap, according to the presentation, forecasts achieving cost savings through economies of scale, as well as enhancing direct sales.

Currently, 69% of the revenues from its hotels come through tour operators. Thanks to its asset optimisation strategy, Hispania expects to increase the value to its shareholders by more than €30 million in the Guadalmina and Holiday Inn Hotels. Meanwhile, in the portfolio as a whole, it hopes to generate €60 million of additional cash.

The company, which has not detected any impact on demand following the terrorist attack in Barcelona in August, expects revenues per available room (RevPar) to grow by more than 10% this year.

Original story: Expansión

Translation: Carmel Drake

Ilunion and Vincci Launch A €500M Hotel Socimi

21 June 2016 – Expansión

Vincci Hoteles and Ilunion have launched a Socimi called Plaza Hotel Assets.

The agreement between the two companies forecasts an ambitious growth plan, through acquisitions and contributions of hotel assets in urban and vacation locations.

The establishments will be situated in Madrid, Barcelona, the Balearic Islands, the Canary Islands, the Costa del Sol, as well as in certain international destinations.

This Socimi has been created with the objective of facilitating the growth of these two groups in the Spanish tourism sector and consolidating their growth plans as operators.

According to the CEO of Vincci Hoteles, Carlos Calero, the opportunity for multi-management within the same Socimi means that a lot of value has been placed on the versatility that this new form of growth offers. The hotel chain, which has been operating in the sector for fifteen years, has forty hotels in its portfolio and owns properties in Spain, Portugal and Tunisia.

Meanwhile, the CEO of the Ilunion group, Alejando Oñoro, thinks that this agreement is good news for his company, as it represents another step in the consolidation of the group launched just over a year ago.

Similarly, he is convinced that the project will help to create quality jobs for people with disabilities in a strategic sector for the country, such as tourism; and will continue to expand accessibility and design for everyone in hotels.

Original story: Expansión

Translation: Carmel Drake

Q1 2016: 4 Largest Socimis Almost Their Triple Profits

18 May 2016 – El País

The Socimis have become one of the most attractive investment vehicles in the financial market. With an annual return of around 5%, the four largest Socimis – Merlin Properties, Hispania, Lar and Axiare – earned €73.3 million in total during the first quarter of this year, which represents almost triple the €28.8 million that they achieved during the same period last year. These companies now own property-related assets amounting to more than €5,600 million.

The Socimis are key players in the Spanish real estate market. The four largest companies have starred in high-profile acquisition of buildings, shopping centres and hotel chains in recent months. During the first quarter alone, they have bought properties for €285 million and they are now preparing new acquisitions for the months ahead. These companies are revitalising a depressed sector thanks to, amongst other reasons, the tax advantages that they enjoy.

The returns that these firms are generating are overwhelming. The four largest Socimis – Merlin, Hispania, Lar, Axiare – generated income of €127 million during the first three months of the year and a profit of €73.3 million, according to information published by Spain’s National Securities Market Commission (CNMV). Most of their revenues come from the lease of shopping centres, hotels, offices and other properties that they acquire using funds raised from investors. (…).

Their rise has been meteoric. The largest Socimi, Merlin Properties, has a portfolio of 1,017 assets (buildings, offices, retail premises, leisure centres) worth more than €3,218 million. During the first quarter of the year, it earned €45.24 million, up by 131% compared to the same period in 2015 and it is rubbing shoulders with the country’s largest companies in the Ibex 35 after buying Testa from Sacyr last year for €1,794 million.

Hispania also stands out in the sector thanks to the prestige of its major investors. The magnate George Soros (16.7% of the capital) and the popular investment fund manager John Paulson (9.85%) feature amongst its shareholders. (…). The company is the owner of properties that it leases to hotel chains such as Barceló, Meliá, NH and Vincci, amongst others.

Another one of the largest Socimis is Lar España, which doubled its revenues during the first quarter of the year. This company is undergoing expansion, like all of the firms in the sector, which led it to purchase a retail complex in Barakaldo, the Palmas Altas Norte shopping centre (Sevilla) and to formalise the purchase of the remaining stake in the La Marina shopping centre in Ondara (Alicante) for €70.6 million.

Meanwhile, Axiare recorded a profit of €5.1 million, which represents a 1% increase with respect to the same period last year. Nevertheless, its revenues have grown by 38% due to the operation of new acquisitions signed last year. During the first three months of the year, Axiare spent €33 million acquiring two buildings: one property on Josefa Valcárcel (Madrid) and one shopping centre in Roquetas de Mar (Almería).

Original story: El País (by J. Sérvulo González)

Translation: Carmel Drake

Hispania’s Hotel Socimi Evaluates Potential New Partners

14 May 2015 – Cinco Días

Bay, the hotel vehicle created by Hispania and Barceló, wants to strengthen its growth. The Socimi, which specialises in the Spanish holiday hotel segment, is seeking to expand its assets and obtain a critical mass with which to debut, first on the MAB, and then on the main stock exchange.

The head of the hotel sector for Hispania, Javier Arús, has acknowledged that the Socimi is interested in continuing its purchase of assets in the Canary Islands, the Balearic Islands and on the coast. For the time being, the vehicle owns 11 hotels and 3,946 rooms, expandable to 2,151 more, as the result of an agreement with Barceló, which has required an investment of €421 million. According to Arús, this amount (of total investment) will have to increase to €1,000 million to ensure the appropriate “critical mass” for floatation on the stock exchange.

A few weeks ago, Hispania revealed that it had secured €545 million to invest in assets after completing a capital increase, which involved the accelerated placement of 27.53 million shares. This financial muscle will allow it to make the upcoming purchases amounting to €200 million that it announced recently. Within the hotel sector, Hispania announced in November that it was in the advanced stages of studying a transaction amounting to €40 million involving a hotel asset in the Canary Islands with 700 rooms.

At a conference about hotel investment in Spain organised by Garrigues and Cehat (la ‘Confederación Española de Hoteles y Alojamientos Turísticos’ or the ‘Spanish Confederation of Hotels and Tourist Accommodation’, Arús said that Bay is (currently) analysing the entry of family hotel groups, either through cash or hotel assets. “There is a huge opportunity to grow in (terms of the number of) rooms”, said the executive, who pointed to the possible scaling up of Bay’s model within the Spanish holiday segment.

The investment vehicle created by Hispania and Barceló expects to own assets managed by different operators, not just the Mallorcan group. In fact, Arús revealed that Barceló is not expected to operate the next few hotels that the Socimi acquires.

As well as creating the Socimi with Barceló last year (and taking a 80.5% controlling stake), Hispania purchased the Hotel Melia Jardines del Teide for €36 million, two NH hotels in Madrid for €42.15 million and the Hotel Guadalmina in Marbella for €21.5 million, as well as a hotel from the Vincci chain. The company has not ruled out transferring these assets to Bay during the second half of this year.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake

Hispania Acquires Hesperia Ramblas & Vincci Málaga Hotels For €27.9m

15 January 2015 – Hispania press release

Hispania Activos Inmobiliarios, S.A. (Hispania) has acquired the Hesperia Ramblas hotel in Barcelona and the Vincci Málaga hotel for a total amount of €27.9 million, through its subsidiary Hispania Real SOCIMI, S.A.U.. In both transactions, the consideration has been fully disbursed from Hispania’s own funds.

These two acquisitions fit Hispania’s investment strategy in urban hotels, reinforcing its presence in two very important markets in Spain. They also complement the acquisitions made by the company back in July 2014 in the Madrid region, bringing Hispania’s total urban hotel portfolio to four.

Hotel Hesperia Ramblas

The Hesperia Ramblas is a 3* hotel with 70 rooms, located next to Las Ramblas, Barcelona’s main tourist area par excellence and close to the emblematic market La Boquería. The acquisition includes a retail space, which is leased to a financial entity. The aggregate investment amounts to €17.5 million.

The hotel is currently managed by Grupo Hesperia (the Spanish hotel operator) under a long-term lease agreement, whereby the rent received will increase until 2019. The average gross yield of the investment stands at 7.6%.

“Barcelona is a strategic location for Hispania due to its excellent positioning as a tourist and business destination, which means the Hesperia Ramblas hotel fits perfectly within our hotel portfolio”, stated Concha Osácar, Board Member of Hispania.

Hotel Vincci Málaga

The Vincci Málaga is a 4* hotel with 105 rooms, located right on the seafront in Málaga city. It is currently operated by Grupo Vincci (the Spanish hotel operator) under a long-term lease contract. The hotel’s estimated gross yield for 2015 exceeds 8%.

“2014 has been a historic year in terms of visitor numbers, nights and average stay for the city of Málaga, with an average occupancy during the year of more than 70%, up 5 p.p. on 2013”, said Concha Osácar. “In addition, the RevPar growth in 2014 in the city of Málaga has experienced a double-digit increase, positioning it as one of the cities with the biggest growth in Spain in 2014”.  

Original press release: Hispania

Edited by: Carmel Drake

 

Vincci to Open Six New Establishments Within Two Years

14/10/2014 – Expansion

Vincci re-starts its growth plans. The hotel chain controlled by the Calero family is going to add to its portfolio six new establishments ranging from four to five stars of the quality ranking over the years 2015 and 2016. Vincci will operate rented buildings in Portugal (Oporto and Lisboa) and, above all, in Spain (Valencia, Malaga, Bilbao and Madrid, precisely at the number 10 of Gran Via street in the capital).

New openings mean adding up almost 600 keys with the total result of 40 hotels and 5.470 rooms. Also, the chain keeps a close eye on principal European capitals, as well as the U.S. cities (New York and the Eastern Coast), Tunisia and the Carribbeans.

Vincci opts for rental agreements and growth based on partnership. Asked how much the chain might still expand, its CEO Carlos Calero assures it may assume between 15 and 20 new hotels more.

Better Performance

The executive states that after the poor development in 2013, the year 2014 sees a slight increase in the hotel market. Figures confirm his words. In Spain and Portugal, sales improved 7% from January until the end of August and the outlook for the last quarter is optimistic. Throughout 2013, Vincci earned €144 million and employed 2.000 workers.

Asked about his opinion on the opening of a Four Seasons hotel in Madrid and the rise in competition in the market, Mr. Calero responds that if such big-name firms wanted to invest in Spain, this was due to the country’s potential to crawl out from the recession.

‘Four Seasons is going to contribute to higher average room prices in the Spanish capital’, he says. The CEO is also convinced that there will be more alliances in the future, such as the partnership of AC and Marriott.

Finally, Carlos Calero calls for better sector debugging and regulation on the holiday rentals.

 

Original article: Expansión (by Yovanna Blanco)

Translation: AURA REE

Pau Guardans As Favorite At Bidding For Hotel Ada Palace In Madrid

19/09/2014 – Expansion

Hotel Ada Palace is situated at number 2 of the Gran Vía street in Madrid. Ever since closed on April 29th, the establishment has been looking for a new manager. The odds are high that Pau Guardans, the CEO of the Unico Hotels & Real Estate, will soon take this position as the entrepreneur has taken the lead among both foreing and domestic hotel chains that would certainly like to snap up the precious property, like Melia, NH, Vincci and Room Mate.

Mr Guardans owns three hotels in Bilbao (Hotel Miro), Barcelona (the Gran Hotel Central, the owner pictured on its roof) and Madrid. In the capital, the businessman operates Hotel Unico, disposing of 44 keys and located on the Claudio Coello street. He bought the establishment in 2011 from Rayet for around €18 million. In 2007, Rayet and Guardans decided to invest together €350 million in five high-end hotels but due to arrival of the crisis, the plan fell through.

The property belongs to La Real Gran Peña, a private equity firm set up by servicemen in 1869. Conflict between the company and the tenant of the hotel, Corporación Hispano Hotelera, led to the closure of the establishment.

The owner denies having selected a new manager and admits that the 80-room hotel will have to undergo a refurbishment. The property is notworthy, if only because of its terraces known Madrid-wide.

 

Original article: Expansión (by Yovanna Blanco)

Translation: AURA REE