Number of Mansions and Hotels at Auctions Has Increased

Number of Mansions and Hotels at Auctions Has Increased

The difficult situation in the hotel and restaurant business has particularly hard hit companies focused on organizing events. Many of these properties are put up for sale, and their number is especially large in Barcelona, where purchasing has become a way to acquire hotel properties whose reopening is impossible due to municipal restrictions.

More than a year-long pause in the tourism sector has left the market in an unstable state, but investors maintain long-term optimism. According to the pan-European Cushman & Wakefield Hospitality survey, “40% of respondents intend to acquire more hotel properties, and 29% plan to continue investment activities at the same volume.” Only 21% of investors plan to reduce hotel purchases.

In 2020 — possibly the worst year for tourism in history — Spain recorded a very significant volume of hotel investments, close to €1 billion.

Hotels and Wedding Estates

Spain is one of the European countries with the largest number of rural estates, many of which include a country house, making them an ideal target for those who want to add a rural asset to their portfolio. Many of these estates have a farm and livestock, which helps cover expenses and generate income.

For those who are not attracted to farming, organizing events has been a way to extract profit for many years. The year-and-a-half pause in public life has led to some of these enterprises being on the verge of bankruptcy, which has caused a boom in sales of such properties at auction sites.

For example, Asemar Concursal, a company specializing in asset liquidation during bankruptcy, has placed an announcement on its platform about an upcoming auction of a rural estate in the city of Viladecavalls (Terrassa). The minimum price is €3,187,334.53, the estimated value is €4,249,779.37. The estate with an area of 54,686 m² is in excellent condition and equipped for holding weddings and large events.

Another example is Finca Masia Bach with an area of 48,400 square meters, of which 23,446 are occupied by buildings and warehouses previously used for producing red, white and rosé wines, as well as cava. The total built area of the estate is 3,000 m². Price is by agreement.

Barcelona: A Unique Opportunity

In the first half of 2021, the volume of hotel purchase and sale transactions in Catalonia amounted to 225 million euros, of which more than 200 million falls on Barcelona, according to Colliers International Spain.

“Those who owned a hotel in Barcelona in recent years had a treasure that was impossible to part with. Tourism and revenues grew steadily, and the moratorium on opening and construction of new hotel facilities, introduced in 2015 by Ada Colau’s city council, turned hotels into an impregnable fortress. But the tourism crisis caused by the pandemic brought many owners to the point where they had to put their properties up for sale.”

For this reason, Barcelona took first place in the ranking of the most attractive cities for hotel investment, overtaking such historical destinations as London, Paris and Amsterdam, according to a Cushman & Wakefield survey.

Second Half of 2021 — Time to Act

The need to sell and appetite for purchases should “meet” in the second half of the year, as stated in the Colliers report on hospitality sector investments. “Among the investment community there is a high level of consensus and conviction that in the medium term tourist demand will recover, and the consequences of Covid-19 will allow acquiring hotels at more reasonable prices than in 2019. Nevertheless, several more months will pass before the real start of a significant number of deals. This is connected not only with the fact that hotel owners need to wait for the prospects of the Easter and summer seasons, but also with the fact that financial institutions still do not open the financing tap for purchases,” note industry experts in the report.