Intermoney | On Monday afternoon, Meliá published a new valuation of its property assets, which was carried out by CBRE. In it, the value of the assets under ownership totalled 4.041 billion euros, to which is added the 600 million for the company’s participation in assets held under joint ventures.
This would imply an increase of 5.8% in the valuation vs 2018, when the last one was carried out, despite the reduction in the number of assets over this period. Without taking into account those assets which have been sold, the assets which Meliá still has have revalued 10.6% (+6.1% currency differences, and +4.5% for the revaluation of the asset). This is mainly thanks to the renewal and repositioning of its properties and its bet on more exclusive segments. The value per room stands at 307.275, +21.2% vs 2018.
Meliá currently has 57 assets, of which 27 are in Spain (31.8% of total value) 8 in Europe (18.9% of total value), 9 in Mexico (24.5% of total value), 8 in the Dominican Republic (21.9% of total value) and 5 in the southern cone of America (2.9% of total value).
To evaluate these assets CBRE has mainly used discounted cash flows, looking at the business expectations for each property and the context of the market from recent transactions, adjusted according to factors such as location and the quality of the asset.
Meliá’s bet on the luxury segment is going to be its strategy looking ahead. It has announced that expectations are for this segment of its business to grow 40% in the next three years. This means that during this period one of every three new openings will be of this type of hotel.
Valuation:
We consider Meliá’s bet on higher value-added segments as positive. And also that it is focusing its future growth plans there, allowing it to improve the quality of its assets. That said, we believe that since the group made the valuation in July 2022 the macroeconomic situation has changed rapidly. The hike in interest rates has had a negative impact on the valuation of these assets, complicating the sale they had in mind to close before year-end. We remain cautious on the stock until there is a considerable reduction in debt. We maintain our Hold stance and Target Price of 5,2 euros/share.
