Hispania buys 7 hotels for €165Mn
Hispania buys 7 hotels for €165Mn
Hispania has bought an option to acquire 7 resort hotels (1,701 rooms) in the Canary and Balearic Island for €165Mn from Alchemy. The portfolio includes AluaSoul Palma, AluaSoul Mallorca Resort, AluaSoul Alcudia Bay, AluaSoul Ibiza and AluaSun Torrenova in the Balearic Islands; and Ambar Beach (Fuerteventura) and Parque San Antonio (Tenerife) in the Canary Islands. Alua Hotels & Resorts will continue manging the portfolio under a fixed & variable rent. The deal is expected to close in Feb-18.
Investment phase is almost completed
With this €165Mn investment and the €20Mn repositioning capex, Hispania will deploy most of its remaining firepower, that we estimate in approximately €200Mn. After this deal, Hispania will own 45 hotels totalling 12.938 rooms, worth c.€1,700Mn. It breakdowns as follow: 1) 64% in the Canary Islands; 2) 23% in the Balearics; 3) 7% in Andalusia; and 4) the remaining 6% between Madrid and Barcelona.
The divestment phase should be completed by the end of 2020. Residential asset are being sold unit by unit. Office divestments should be retaken in 1Q18, after the Catalonian elections in December 2017. We expect the Hotels divestments to be boosted in 2H19.
Positive news for Hispania
According to the company, the portfolio has a current gross yield of c.8% and it could to reach 9.5% in 2022, after the repositioning works. It is higher than the average 6.5% gross yield 2018e that we assume for the BAY Portfolio (with a similar contract), and therefore we expect the deal to be well received by the market.
We reiterate our Hold recommendation
The company’s strategy gives visibility to our valuation (€15.6/share) as it should be fully monetized before the end of 2020. In addition, we expect positive news from its divestments. We maintain unchanged our Hold recommendation.
Hispania Activos Inmobiliarios SOCIMI SA, formerly Hispania Activos Inmobiliarios SA, is a Spain-based company primarily engaged in the operation of commercial real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties in Spain. The Company's activities are divided into five segments: Offices, which leases assets for business purposes; Residential, which provides residential units; Hotels, which rents hotel real estate; Hotels under management, which includes operation and development of hotels within concession agreement, and Other, which leases other real estate assets, such as logistics centers and shopping malls. The Company operates through a number of subsidiaries, such as Hispania Real SOCIMI SAU, Bay Hotels & Leisure SOCIMI SA and Eco Resort San Blas SLU.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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