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Fairmont Makes For Madrid’s Ritz As Marriott Withdraws From the Bidding
23/09/2014 – Expansion
A new bidder joined the auction of Hotel Ritz in Madrid. As Marriott backtracked on its €130 million bid for the one of the most beautiful hotel jewels in Spain, Fairmont barged in to compete for it. The property belongs to Omega Capital of Alicia Koplowitz and to Orient-Express, holding 50% of it each.
In 2003, the owners bought the establishment for €125 million from Le Meridien.
In May, the partners hired JLL (former Jones Lang LaSalle) to look for a new purchaser in the middle of fever caused by the arrival of Four Seasons to the capital. The high-end chain from Canada is going to open a hotel inside the Canalejas complex in 2017.
The move convinced many international chains to invest in Madrid. For instance, such brands as Mandarin Oriental, Hyatt, Marriott, Hilton or InterContinental are already eyeing the market. Therefore, the bidding for the Ritz establishment was expected to be more fierce.
Marriott outbid all the competitors with its €130 million offer ,however in the last moment the board of directors of the famous chain opted out. Purchase of the 137-room and 30-suite hotel also means a €40- to 50-million investment in its refurbishment.
Fairmont was officially founded in 1907 but its roots reach the year 1885. In 1999, the chain fell in hands of a hotel branch of Canadian Pacific Railway but its brand name was saved. In 2006, Fairmont joined Raffles and Swissôtel in a holding, called FRHI, managing 110 hotels in Europe and U.S.A. Four years later, Qatari Diar paid €847 million for a 40% stake at the holding and offered buying the share of Colony Capital.
The Qatari fund acquired Hotel Vela for €200 million and, at the beginning of this year, Hotel Renaissance for €78.5 million from Marriott, both properties found in Barcelona.
Hotel Ritz itself is a collateral for the loan that its owners borrowed from Eurohypo and which was included in the mega-NPL sale called the Octopus Project, finally sold to U.S. fund Lone Star.
Original article: Expansión (by Y. Blanco & J. Zuloaga)
Translation: AURA REE