Lugo’s Only 5-Star Hotel Goes up for Auction for c. €5M

16 May 2018 – El Confidencial

It has been closed for four years and weeds are spreading uncontrollably across the estate. The only luxury five-star hotel in Lugo has gone up for auction for just over €5 million – the auction price includes the hotel’s furniture and a chapel in two separate lots – as part of the liquidation plan that is being followed since Mercantile Court number 12 of Madrid ruled against its owner, Alvaher 98. That company purchased the property in 2007 and built on the ruins of what used to be the Palacio del Conde de Lemos. Alberto Vázquez wanted to turn around his business activity, which focused on meat products and recover this historical and artistic gem, which originally belonged to the López de Lemos family and which had been abandoned since the beginning of the 20th century.

The bidding has now concluded with a single bidder offering €2.4 million for the hotel, below the €4.7 million auction price. As such, we will have to wait and see whether the court authorises the sale or not, given that it would not cover the debt. Meanwhile, in the other lots, €60,000 has been offered for the furniture, compared with an auction value of €450,000, and €6,000 has been offered for the chapel, above the auction value of almost €1,800.

The Hotel Palacio de Sober, whose refurbishment cost several million euros – most of which came from public funds – is also the oldest civil architecture building in Galicia, the largest estate in the autonomous region, and its chapel dates back to the 7th century. A year ago, the same court opened a sales process for possible interested parties to bid, and although several companies expressed their interest, no firm offer was submitted. Now, as part of the liquidation process of the owner company, its fate is being put to the test through a public auction (…).

The property has several financial charges, including a mortgage in favour of the Galician Institute for Economic Development (‘Instituto Galego de Promoción Económica’ or Igape), the public entity that backed the project to open the hotel at the time through loans and subsidies, as well as embargoes for non-payments to the Social Security department.

Located in the south of the province of Lugo in a natural setting, 10km from Monforte de Lemos and 38 km from Ourense, it opened its newly renovated doors in 2010 (…). It had 43 super-luxury rooms, all of which measure more than 25 m2 (…).

The price per room used to cost no less than €300 per night for the cheapest rooms, whilst sleeping in one of the suites cost upwards of €750 (…).

At the beginning of 2012, just two years after its inauguration (…), the Palacio de Sober stopped receiving guests and it definitively closed its doors in March 2014 (…). In February 2015, the owner company was declared bankrupt (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

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