6 April 2015 – Expansión
Project / The German fund has acquired an old residential building, which it will convert (into a hotel), including a retail space.
A new hotel project is beginning to take shape in Madrid, led by a German fund. The building is located on Calle Huertas, 16, in one of the most important tourist areas of the city. “Previously, the property was owned by a Spanish investor. We were looking for a building in the area to convert into a hotel and we are now working on the renovation”, explains Marcos López, Director of the consulting firm Ascana in Madrid, the company that advised the transaction.
According to real estate sources, the purchaser of the building is the German fund Aquila Capital, which will invest €28 million in the operation. Ascana declined to confirm the identity of its client.
The building, which has a surface area of 3,600 square metres, was used for residential purposes until now. Those homes will now give way to a boutique hotel or hostel, a type of accommodation that is very much in vogue in Europe’s major capitals. “There is significant demand in the market from funds looking for buildings located in the centre of Madrid and Barcelona to convert them into hotels. This interest is very much focused on prime areas from a real estate, tourism and retail perspective, since investors are looking for a balance between achieving good returns and securing a safe investment, through a well-located building”, says López.
The new owner paid around €17 million for the property, which together with the renovation work, will result in a total investment of €28 million. The refurbishment work is expected to take 18 months.
Created in 2011, the fund Aquila Capital holds investments in the real estate, wind energy and agricultural sectors, amongst others. In August 2014, the German fund acquired the Husa Chamartín hotel, located next to the train station of the same name in Madrid, with 378 rooms. The property is managed by the tourism group Gowaii, which won the rights (to operate the hotel) in a legal auction in June last year for €2.25 million.
Aquila is currently looking for an operator for the hotel (on Calle Huertas), as well as tenants for the two retail stores, which have a combined surface area of 400 square metres.
In 2014, total investment in the hotel sector in Spain amounted to €1,000 million, i.e. 50% more than in the previous year.
Original story: Expansión (by Rocío Ruiz)
Translation: Carmel Drake