In cooperation with our partner – the leading Spanish hotel management company – we created a portfolio of carefully selected hotels in the most attractive parts of Spain.
Each hotel in our portfolio might be taken under management of the professional hotel management company under long term lease contract.
The leading Spanish tour operator is ready to commit to the regular pre-foreclosure of the hotel rooms of most of the hotels in our portfolio.
Thorough business due diligence of most of the hotels has already been completed by the professional hotel management company.
The characteristics of the hotels, together with positive trends in the market, significantly increase the possibility of future asset price growth.
Here we present eight selected hotels from our portfolio. Due to the confidential nature of the hotels listings, this website contains only high-level information on the assets. More detailed information is available upon request.
Operating hotels with positive financial results provide a stable and predictable cash flow and therefore financing for their acquisition can be obtained from Spanish banks. Currently it is not unusual to finance up to 80% of the purchase price at a very attractive interest rate.
We consider a segment of 3 and 4 star hotels with a price tag of up to 20 million EUR as very interesting. The hotel market in Spain is growing rapidly. Currently, large international investment funds compete for the opportunity to acquire the most attractive hospitality assets in Spain. While their focus was initially on 5 star hotels, it has recently started shifting to 3 and 4 star hotels.
There are two main options for structuring relationships between owners and hotel operators in Spain: Management Contract, when a professional management company operates the hotel for a management fee (usually 20% to 30% of profits) and Lease Contract, when the hotel property is leased to a management company for a fixed rental fee payable to the hotel owner, regardless of the actual financial performance of the hotel. The lease option is the most common in Spain. Considering current market conditions, an investor (buyer of the hotel) may expect the annual rent to be at the level of 6% - 7% of the purchase price.
It is up to buyer to decide who will be managing the acquired asset. However, management of the hotel by a professional operator has many advantages - known brand, the efficient business process, reduced costs, as well as the possibility to obtain guaranteed rental income.
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