Meliá Finalises Sale & Leaseback of Palacio de Congresos Hotel in Valencia

20 July 2018 – Las Provincias

The tallest skyscraper in Valencia is on the verge of changing hands. The sale of Meliá’s Palacio de Congresos Hotel, located on Avenida de las Cortes Valencianas, number 52, is being finalised for €50 million, according to sources speaking to Las Provincias. The operation is expected to be signed in September and several investors have expressed their interest in acquiring the former Hilton Hotel.

The owner of the iconic property, the fund Colony Capital, took just two months to put it on the market after acquiring it in February when it purchased the fund Continental Property Investments (CPI), the former owner of the hotel. According to the same sources, the candidates to acquire the building now include Socimis, institutional investors and family offices, such as the Valencian Zriser group, the firm owned by Pablo Serratosa. Another interested player is AXA Real Estate, the company that acquired the Hilton Hotel Diagonal Mar in Barcelona last year.

Despite the change of owner, the management of the hotel will continue to be entrusted to Meliá, which signed an extendable 10-year operating contract in 2011. It is a strategic asset for the hotel group, given its location next to the Palacio de Congresos, which makes it the best-positioned accommodation on the market for business people and guests of events organised in the Valencian enclave.

A yield of 5%

According to sources familiar with the operation, the asking price for the hotel was €45 million, which was the “minimum to make an offer”. Nevertheless, the market was pricing it at around 10% more, approximately €50 million and some even think that it will be sold more than that. “Socimis and institutional investors look for yields of 5% per year”, they reveal.

In addition, the sale price per room will range between €165,000 and €175,000. In terms of the price per overnight stay, hotels of this kind with an occupancy rate of 80% typically range between €90 and €95 per room. The expectation is that the former Hilton will cost around €100 per night in five years time.

The former Hilton is a 5-star hotel that opened its doors to the public in May 2007. It stands 117 m tall and has 29 storeys, with 269 rooms, 33 suites and two presidential suites. Moreover, it has a convention room and 18 meeting rooms. The building was constructed between 2002 and 2006 at a cost of €110 million, double the price at which the owners want to sell it for now. It was in 2010 when the owner company, the firm Hotel Palacio de Congresos SL, sold the property to CPI to avoid its definitive closure after that company filed for voluntary creditor bankruptcy.

Original story: Las Provincias (by Elísabeth Rodríguez)

Translation: Carmel Drake

Invesco Invests €30M In A Residential Development In Valencia

11 July 2016 – Valencia Plaza

The international fund Invesco has invested around €30 million in a 15,000 sqm residential development in Valencia. The chosen site is the Ciudadela building, which has been used as office space until now, and which has been purchased from the company Ciudadela in a transaction brokered by Olivareas Consultores. The building is located between Cronista Carreres and Paseo de la Ciudadela, overlooking the river.

According to the Director of the Residential Sector at Olivares Consultores, José Ramón Ballesteros, who is marketing the homes, this project will involve the construction of 58 homes of varying sizes, with between two and five bedrooms. Finished to a very high standard, the building will have a gym and solarium for exclusive use of the residents. The homes will be sold to the public for between €3,000/sqm and €3,200/sqm.

This investment comes after years of small investments by funds…During the month of September, the prices and plans will be made available, although a high number of reservations have already been placed. Invesco is one of the most important investment management funds in the world, with assets under management worth more than USD 800,000 million.

This residential development is just another example of the on-going reactivation of the property market in the city of Valencia. The Zriser Group, the investment arm of the Valencian entrepreneurs Ana and Pablo Serratosa, are also selling a complex of luxury homes off-plan, located at number 11, Avenida de Francia. The complex, which represents the firm’s first foray into urban development, is called Llum Plaza and will be constructed next to the Hotel Barceló, on a plot of land that the company acquired in 2014, according to sources from the Zriser Group. That development contains 34 three- and four-bedroom homes and has already seen strong demand.

Sareb has also launched two developments in the city of Valencia, which will add a total of 118 new homes. The plots of land owned by the bad bank are located on Calle Río Escalona – between Avenida del Puerto and Paseo de la Alameda – and on Avenida Alfahuir.

Original story: Valencia Plaza (by Esfefanía Pastor)

Translation: Carmel Drake

Blackstone, Cerberus, Arcano & Others Head To The Beach…

30 May 2016 – El Confidencial

(…). Just over a year and a half ago, the large real estate investment funds were concentrating their activity in Spain’s two large (regional) capital cities (namely, Madrid and Barcelona). Nevertheless, the saturation of operations and a gradual increase in prices (there is no sign of a bubble in either city, but there are increasingly fewer bargains to be had) has forced investors to explore new locations, in cities that are one step down in terms of size and population, but where there is significant latent demand, and above all, very attractive prices for operations with payback periods of five or seven years. Valencia and the Valencian Coast are in the spotlight, according to sources from an important real estate consultancy firm headquartered in the city, which has participated in some of the largest transactions completed in recent months.

Blackstone, Cerberus, and even the Real Estate division of managers such as Arcano, have been exploring and closing operations in the Valencian market for more than 12 months now, primarily acquiring debt portfolios secured by well-located residential properties and focusing on upper-middle class segments of the population with a certain amount of liquidity and the capacity to borrow. The assets acquired include not only finished promotions, but also urban land, such as the case of a group of plots located in Nou Campanar, which Sareb has just sold to the US fund Castlelake. The land used to be owned by Juan Armiñana, one of the local property developers who made his fortune during the real estate bubble and was destroyed following the crash, leaving behind a small empire of bankrupt companies and millions of euros of debt from the banks.

The presence of a fund like Castlelake in this type of operation is striking because two years ago, no-one would have imagined such a fund exploring operations beyond Madrid or Barcelona. Last year, Sareb sold it 76,000 sqm of residential land in the Madrilenian town of Boadilla del Monte for around €13 million. In the cae of Nou Campanar, the consideration has been lower, given that the plot of land measures just 12,000 sqm and has a buildability of 40,000 sqm.

The funds are exploring “prime” areas of the city of Valencia, both in the centre and along the seafront, as well as along the Patacona beach area, where there is still some undeveloped land and several developments for sale, in the hands of financial institutions. In the same way, local investors, such as the Zriser Group (Pablo Serratosa) are looking to launch a residential development in the vicinity of the Ciudad de las Artes y las Ciencias. (…).

Five year payback periods and returns of 20%

The logic behind these investments tends to have a common element – payback periods of just over five years with average returns of 20%. These deals are conceived from a purely financial point of view, but they include agreements with construction companies when they involve land development and sales plans. (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Zriser Group Sells Generali Building In Valencia For €30M

25 May 2016 – Levante-EMV

The Valencia-based Zriser Group, the investment vehicle owned by the siblings Pablo and Ana Serratosa, has sold the Generali building for €30 million to the businessman Juan Luis Gómez—Trénor, founder of the former Colebega bottling plant and shareholder of Coca-Cola European Partners with a 8.5% stake.

The property was designed in 1930 by the architect Luis Bonetm, a disciple of Gaudí and one of the construction directors at the Sagrada Familia. The building has a surface area covering 6,079 sqm across six floors, containing offices and commercial premises, and its main tenant is the law firm Garrigues.

The Zriser Group purchased the building, located in La Plaza del Ayuntamiento 27, from Generali Seguros for €21 million in 2011, which means that it has obtained a capital gain of almost 50% in five years.

Sources at the investor group declined to provide any information about the buyer or the consideration paid for the operation on the grounds of confidentiality. However, other sources familiar with the sale confirmed that the proceeds amounted to around €30 million and that the purchaser is Juan Luis Gómez-Trénor. The transaction comes at a time when the real estate sector in Valencia is in full recovery.

Luxury development

In just a few days, the Serratosa’s investment group has placed 33 of the 34 homes in its first housing development on the market in Valencia. Zriser is going to construct luxury homes at number 11 on Avenida de Francia in Valencia, next to Hotel Barceló.

Despite the sale in 2011, the insurance group Generalia has continued to occupy the building in La Plaza del Ayuntamiento, as a tenant alongside the law firm Garrigues. The Zriser Group already owns another office building, Edificio Alameda, which it acquired in 2009, for €24.3 million. Moreover, it owns another property on La Alameda (which it leases to PricewaterhouseCoopers) and another one on Alfahuir.

Original story: Levante-EMV

Translation: Carmel Drake