29 January 2016 – El Confidencial
Knowing how to combine business with respect for our national heritage. That has been the key that has enabled Mazabi to acquire Hotel Madrid and the historical Teatro Albéniz, an asset that the Community of Madrid had decided to protect as a Property of National Interest (“Bien de Interés Patrimonial”or BIP) and which the family office has acquired from Neinor, after resolving the associated urban planning problems.
Last Friday marked the closure of the period for public claims that the regional Government, led by Cristina Cifuentes, had opened to declare the historical building a BIP. The proposal was undertaken to ensure the survival of the property and avoid its demolition, something that several citizens’ groups had been demanding for some time. Following that deadline, the last great uncertainty surrounding the building was lifted and that has paved the way for the definitive agreement between Mazabi and Neinor.
The real estate company, which is controlled by Lone Star, inherited both the hotel and the theatre from their former owner, Kutxabank, after it had previously foreclosed both assets. The company has been in exclusive negotiations with Mazabi for four months. To seal the deal, a solution for the Teatro Albéniz needed to be guaranteed, and that option was resolved on Friday, when the period for claims came to an end. Sources at the family office have confirmed the deal, but have declined to make any further comments.
Sources close to the transaction say that Mazabi’s plans now involve returning the two buildings to their former splendour, and leasing them in their entirety to a luxury hotel chain. The growing interest from these types of operators in locating themselves in the centre of Madrid will certainly play into the hands of the family office; and the development may include the renovation of a theatre annex as a means of allowing (the chosen hotel chain) to offer a differential value proposition.
The theatre’s future
In total, the operation involves a surface area of 13,000 m2, which have been assigned various uses. In the case of the Hotel Madrid, besides tourism, it has a 1,000 m2 retail outlet on Calle Carretas, the street that links Puerta del Sol with Calle Atocha. Meanwhile, the upper floors of Teatro Albéniz may be used for residential or hotel purposes, and the three underground floors, which were destroyed by fire five years ago, have a surface area of 2,000 m2 and may be used as a nightclub.
Given the level of protection announced by Cifuentes, the survival of the entire stage house is guaranteed, and the door is also opened to “all other uses that are compatible with the space and its layout, in other words, plays, shows, concerts, conventions…, in other words, all activities that need a stage and a public…” said the regional government in December.
Having acquired the two buildings, which share a plot of land that used to house the Royal Press in the 18th Century, Mazabi will now begin two years of construction work to completely refurbish them. Although the consideration paid has not been revealed, the valuation of these properties may reach between €70 million and €80 million, on the basis of market rents and once the restoration work has been completed, according to one real estate expert.
Both the hotel and theatre have been closed since 2008. The former was occupied by hundreds of squatters for a time, before the police evicted them at the end of 2011, just after the fire in the basement of the Teatro Albéniz. (…)
Original story: El Confidencial (by Ruth Ugalde)
Translation: Carmel Drake