The BlueBay Hotels group is preparing to position a REIT formed by the emblematic Madrid hotel and other assets in Mallorca and Costa del Sol valued at 500 million euros.
Miguel Ángel, the iconic Madrid hotel puts the finishing touches to its IPO. This emblematic property is set to become part of the REIT emerging from the alliance between the BlueBay Hotels group and Le Royal & Resorts, which plans to launch on Spain’s Alternative Stock Market in the first quarter of 2017.
Initially, the REIT will be composed of other hotels in Mallorca and an urban commercial project in the Costa del Sol region and the Miguel Ángel hotel. Without the opinion of an independent expert, initial estimates value the REIT at approximately 500 million euros.
The company has already commissioned the elaboration of the informative market incorporation document to Armabex, which will act as the global coordinator together with PwC in the entire process.
The hotel’s contribution, in the hands of the Iraqi-born British investor Nadhmi Auchi, and owner of Le Royal Hotels & Resorts, has been carried out through a corporate restructuring, mainly with local companies and in others in Luxembourg.
“Assets such as the Hotel Miguel Ángel by BlueBay, hotels in Mallorca and an urban commercial development in the Costa del Sol are included in the first phase, although the group will later incorporate properties as the equity restructuring takes place in commercial, fiscal and corporate terms or by purchasing new assets,” explains the chairman of BlueBay Hotels Jamal Satli Iglesias in an interview with the EXPANSIÓN newspaper. “I live in Dubai so the REIT will be managed from there to meet the needs of the different investors from the Middle East, and also from London, for the rest of the international investors,” says the Spanish businessman of Syrian origin.
For the company’s chairman, establishing the REIT is part of the corporate strategy, that just like other international hotel chains, wants to separate the patrimonial value from the operational area. “with this, what we’re looking for is growth and consolidation.”
Among the advantages this REIT offers, Satli Iglesias highlights the great diversification in terms of both properties and rental contracts that enables it to anticipate “attractive profitability that will continue to increase in the coming years due to the real estate’s element of growth and also the part corresponding to the foreseeable growth in the tourism sector.”
Satli Iglesias states that this operation is pursuing “transparency and profitability.” “In this first phase we are more open to institutional investors, hotel chains or hotel property owners entering who wish to join our project.”
BlueBay, the fifteenth largest Spanish hotel company, currently has 42 hotels in its portfolio, of which 50% are owned by the group. “We’re opting for a scheme of hotel management for the establishments we own and our strategy for the future is to increase the number of hotels managed in this way,” he explains.
“The 2017-2020 strategic plan we have just presented anticipates increasing our current hotel offering by about 50% until we exceed 60 hotels at the end of this period. If we speak about the number of beds, we going to more than double them, we’re going to go from having 23,000 beds to more than 50,000 in 2020,” says the group’s chairman.
Satli Iglesias explains that the group plans to allocate roughly 80% of the company’s profits to carry out these expansion plans.