Tectonic movement in the Spanish hotel investment market. For the second time since the economic crisis started, the Intercontinental Hotel in Madrid, one of the most emblematic luxury establishments in the capital, looks for a new owner.
One and a half years after acquiring it as part of a lot of seven hotels managed by the U.S. group in different European capitals, Ghanim Bin Saad Al Saad has decided to put it on sale. According to sources within the market, this investor from Qatar has hired the consulting company Jones Lang LaSalle to look for potential interested parties.
The operation, which is still in a very early stage, could reach the 70 million Euros, which would mean a price per room of 240.000 Euros, according to sources within the industry. The Intercontinental Hotel in Madrid, with a five star rating, is located at Paseo de la Castellana and has 302 rooms (41 suites).
It was built as a mansion in the seventeenth century by the Marquis de Merito, and it was the first international establishment in Madrid. It was opened in 1953, the Castellana Hilton (its manager at the time) turned out to be the preferred one for the Hollywood stars such as Sofia Loren, Ava Gardner or Tony Curtis, among others.
In 1973, it started to be managed by InterContinental, the first hotel group in the world by size, which will continue to operate the asset even if it changes hands, as it has a long term managing agreement.
In 2011, the last available year, Hotelera EL Carmen (the company that operates the hotel) invoiced 21 million Euros, 7,73% less than the previous year. The operation results reached 673.167 Euros. The losses were reduced in about 63%, down to 619.006 Euros. The occupation level reached 66,3%, 4,6% below previous year, and the average income per room increased in 5,5 Euros, up to 183 Euros.
In 2011, the Intercontinental was acquired by the Lebanese investor Toufic Aboukhater, who paid 450 million Euros for a package of seven hotels, (the ones in Madrid, Rome and Cannes, among others).
A price significantly lower than the 634 million Euros that were paid by Morgan Stanley for the transfer of assets in 2006.
At the beginning of 2012, the group of hotels passed to the hands of Mayfair Investments, a company belonging to Ghanim Bin Saad Al Saad, former managing director of Barwa Real Estate, a real estate company whose 45% is controlled by the state of Qatar. He also managed – and is still a member of the board- Qatari Diar, another real estate subsidiary that has acquired the hotel W in Barcelona for 400 million Euros.
The sale of the famous “hotel Sail” is right now an oasis in the Spanish real estate market, where operations are scarce. In 2012, the worse year of the decade, the total investment volume was reduced by 50%, down to 419,4 million Euros.