15 March 2017 – Cinco Días
The Millenium group has resumed its plans to launch a hotel Socimi. Following a break caused by the absence of a Government and the misgivings of some of its investors, the company has returned to the project.
The aim of the firm led by Javier Illán, which has now constituted the Socimi Millenium Hotels Real Estate, involves listing the company on the stock market in 2019, whereby maximising the term permitted for that purpose. Meanwhile, the vehicle is working hard to secure high profile investors and acquire hotel establishments.
Millenium plans to raise around €400 million from investors and expects that its Socimi will have a market valuation of between €650 million and €700 million when its debuts. For the time being, the company does not have a registered advisor for its debut on the stock market, but it has received support from investors who have participated in its investments since 2000, including large homegrown and overseas real estate mutual institutions and pension funds.
For new investors, Millenium has established a minimum entry ticket of €5 million. Moreover, it has not ruled out the possibility of allowing hotel owners to take a share in its share capital in exchange for “gifting” the property to its portfolio. Regarding the debut on the stock market, the company may open up another stock tranche, with a lower minimum investment of around €250,000, to give liquidity to its shares.
The vehicle is expected to acquire around thirty hotels, including those that the group already owns, such as the Hesperia on Paseo de la Castellana, the Hotusa in Plaza de Castilla and the Tryp Chamberí, all in the centre of Madrid.
The Socimi will acquire urban and vacation hotels, however, Javier Illán states that they are also analysing cities that receive lots of tourist visitors. Besides Madrid and Barcelona, he points to other major capitals such as Málaga, Sevilla, Córdoba, Granada, Bilbao, San Sebastián and Valencia. The Canary Islands and the Balearic Islands, together with the Costa del Sol, will be its areas of focus in the vacation segment, all areas that have been under the spotlight of domestic and international investors alike, over the last year.
This year, Illán hopes to close around ten acquisitions on which he expects to spend around €200 million. He also acknowledges that the company is holding talks with all of the hotel chains interested in operating lease contracts.
For the time being, none of these operations has materialised and the hope is that they will be completed one by one and not in batches to avoid acquiring unwanted assets.
The Director also assures that he intends for 70% of the portfolio of establishments to require investment for their repositioning and refurbishment (value added, in English), which whereby differentiates it from the model adopted by Hispania in the vehicle that it created together with Barceló: Bay.
The group, which specialises in the development of luxury residential properties and commercial premises is carrying out detailed analysis with a view to creating a Board of Directors for the Socimi, which will mainly comprise independent directors.
Original story: Cinco Días (by L. Salces and A. Simón)
Translation: Carmel Drake
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Source:: AURA Real Estate Experts