Alicia Koplowitz & Orient-Express Seek Buyer For Hotel Ritz in Madrid

6/05/2014 – Expansion

The Hotel Ritz in Madrid returns to the market after a decade. Omega Capital, an investment firm chaired by Alicia Koplowitz, together with Orient-Express that is managing the establishment hired JLL (former Jones Lang LaSalle) to say goodbye to the property they acquired for €125 million from Le Méridien in 2003.

There are several solutions in talks: the hotel could be sold to a third party but managed by Orient-Express, or the luxury chain could waive operating the Ritz completely. The latter scenario would multiply the number of aspirants wanting to acquire the property. There is also a possibility that a fund would finance refurbishment of the building through more expensive mezzanine debt.

Noteworthy candidates that have already presented their proposal are, among others: Marriott, Hyatt, Hilton, InterContinental or Mandarin Oriental, all looking for an excellent location in Madrid´s center.

Moreover, sources with knowledge of the market suggest that perhaps Orient-Express could buy Omega´s stake in the hotel or vice versa.

The Four Seasons´s plans to open a hotel in the Canalejas complex in the capital in 2017 attracted attention of other world-wide known hotel giants.

When it comes to the hotel itself, at the end of 2012 its books showed a 6% cut in revenues (down to €23 million) and loss reduction by 76% to €3.3 million. That time the property had a mortgage to assure payment of €65 million in loans from Hypothekenbank. In 2013, its owners contributed with €6.38 million that jointly rise the shareholders´credit to €38 million.

The property yet does not dispose of all the town planning permissions from the City Council of Madrid. Investment in its renovation would consume between €40 and €50 million. After the remodelation, it will offer less rooms but more suites (currently it has got 137 of the first and 30 of the second type).



Original article: Expansión (by Yovanna Blanco)

Translation: AURA REE