Hotels change hands: funds, banks and a classic of the business elite


Hotels change hands: funds, banks and a classic of the business elite

A time of low prices due to the crisis, of fishing in a troubled river or of taking advantage of the need for liquidity of the traditional operators. The The hotel sector is experiencing a phase of drafting changes. Not only in the business model, because of the impact that these two years of pandemic are having; also because some investors, not always linked to the accommodation activity, have become owners.

Among them, investment funds that see a recurring income model in hotels, although they have to wait for the pandemic to pass to receive them. Also, financial entities or company managers that, in theory, have nothing to do with tourism, as happens, for example, with the Grifols family.

But, above all, the operations carried out by international investment firms are relevant, such as Brookfield Asset Management, the Singapore fund GIC and the Dutch pension fund APG (which have a joint company, Archer Hotel Capital) or the Castlelake firm.

These firms have changed the map of ownership of Spanish hotels. Brookfield AM has starred in one of the major operations in the sector in recent months with the purchase of four hotels from Selenta Gloup: two in Barcelona (Sofia Barcelona and Expo Barcelona), the Don Carlos Resort & Spa in Marbella; and Mare Nostrum Resort, in Tenerife. This New York manager focuses its investments on infrastructure or renewables, among other sectors where it has the focus, and adds assets worth 650,000 million dollars. It is also one of the firms to which the President of the Government, Pedro Sanchez, presented the Recovery Plan on his last visit to the 'big apple'.

As for the Singaporean GIC - considered one of the largest sovereign wealth funds in the world, controlled by the Asian state - and the Dutch APG, they have paid more than 200 million for a hotel that is not yet operating, the Madrid Edition. Located in the central Plaza de las Descalzas, this year the offer of luxury hotels in the capital, along the lines of the Four Seasons or the Mandarin Oriental Ritz. In this case, the hotel developer was already another investment firm, KKH Property Investors. With this operation, the joint venture between GIC and APG, Archer Hotel Capital, will strengthen itself in the higher price segment, since it has hotels such as the Madrid Palace or the Arts de Barcelona in its portfolio.

As for Castlelake, it is the same investment firm that controls more than 70% of the shareholding of the real estate company Aedas Homes. His leap into the Spanish hotel sector came in 2021 when he became the first investor in the Socimi Millenium Hotels Real Estate. In this last company there were already relevant names in the Spanish business world, with shareholders such as the former president of ONO and former CEO of Inditex, José María Castellano.

The presence of investment firms in the hotel sector is not new but it is growing. "Since 2015 we have observed a strong institutionalization of investment in the sector coinciding with the entry of numerous funds into the Spanish vacation segment, traditionally reserved for operations between hoteliers," explains Laura Hernando, 'managing director' of Hotels at the Colliers consultancy.

"Despite the fact that in recent years the chains have maintained a relevant role from the purchasing side, the deterioration of their financial situation as a result of the pandemic has forced them to sell assets. In this sense, in 2021, there has been a growing participation of investors with a financial profile representing about 86% of the invested capital, compared to 70% in 2019 ", Hernando explains.

As for the reason for this investment in hotels by financial investors, the reason is that Spain is one of the first tourist destinations, which guarantees future customers and reliable returns; and there are commercial proposals for all budgets. In addition, the pandemic has increased the liquidity needs of traditional managers. "The pressing need for cash in the chains has forced divestments that in the past would not have been considered," acknowledges the head of the hotel sector at Colliers. Thus, in 2021, a record investment volume of 3.18 billion euros was achieved.

Behind this figure is, for example, the purchase of eight Meliá hotels by the company made up of Bankinter Investment and the investment firm GMA. Together, the two also manage the Atom Hotel Socimi.

This case of Bankinter and GMA is an example of a model extended in the sector: that of an investment firm that owns a hotel, which is actually managed by a traditional hotel company. The same occurs with Lasalle Investment Management, which has acquired the Barcelona-based NH Collection Gran Calderón. Lasalle has been a particularly active operator, but in other areas of real estate, such as logistics, with so-called 'last mile' assets in Villaverde or Las Mercedes park, in Madrid.

Other names are Starwood Capital, an investor focused on the hotel sector, which has bought the Iberostar Las Dalias; and Schroders, which has done the same with the Gran Hotel Central de Barcelona.

But there are more transaction models aside from the sale of the property while maintaining operational activity. "Traditionally, financial investors have chosen to transfer the management of their establishments to 'classic' hotel operators, either through leasing, management or franchise contracts," says Laura Hernando. "However, in recent years, we have witnessed the entry of 'white label' operators, offering more flexible operating models. Some international investors have chosen to acquire local hotel operators to, with their 'know how', form a platform from which to channel your investments ".

The Mexican group has landed in Madrid RLH Properties. Purchased and maintains the management of two luxury hotels, the Rosewood Villa Magna and the Bless. The Mexican company has as co-presidents the brothers Andrés and Felipe Chico Hernández, sons of Fernando Chico Pardo, who treasures one of the great fortunes of Mexico. Until 2020, its shareholders also included Allen Sanginés-Krause, the Mexican businessman investigated for opaque payments to the king emeritus.

Hotels have a hook for surnames that have linked their business trajectory to very different activities. Last summer, the Grifols, the shareholder family of the plasma manufacturer listed on the Ibex, paid 125 million for the ownership of the Hesperia President of Barcelona. A year earlier, Ricardo Portabella bought the Alexandra hotel, also in the Catalan capital, through his company Anpora Investments. Portabella is part of one of Danone's historic shareholder families.

The former directors of OHL Francisco Meliá and Enrique Benjumea who, together with the former partner of Colliers Spain Antonio Pan de Soraluce, are behind Blasson Property have also changed sectors. This firm has acquired the Mallorcan H10 Punta Negra, which will continue to operate the same chain.

And the investment appetite does not seem to have changed in 2022, given that operations are already planned that, at the beginning of the year, would reach 1,500 million euros. The situation of hotels is, to a certain extent, similar to that of supermarkets, where there are many investors wanting to buy real estate. Of course, in the case of tourism, doubts about how the pandemic may evolve can cause prices to vary and speed up operations.

.



Source link