Tag: canalejas project

Town Hall Seeks To Resume ‘Canalejas’ Construction Work

20 July 2015 – El Confidencial

Almost four months have passed since Madrid Town Hall’s Department of Town Planning decided to suspend some of the construction work at the monumental Canalejas Project, as a precautionary measure. The council, which was led at the time by Ana Botella, took the decision because it considered that some of the demolition work being carried out by the Villar Mir Group was affecting certain areas that are protected due to their historical value and was exceeding the work permitted by the municipal licence.

Following the electoral change, the new team responsible for Town Planning at Madrid’s Town Hall, led by Manuela Carmena, seems willing to resolve this situation as soon as possible. According to sources close to the project, the council is working to create a technical committee that will allow the works to recommence, however the Town Hall has denied that this is the case, at least for the time being. (…).

At the end of 2012, the Villar Mir Group purchased seven buildings located on Plaza de Canalejas (number 1), Carrera de San Jerónimo (number 7) and Calle Alcalá (numbers 6, 8, 10, 12 and 14) from Banco Santander. The group paid more than €200 million for the buildings and with an additional investment of around €300 million, is going to create a unique complex that will house around thirty luxury homes, a shopping centre measuring 16,000 m2 spread across three floors and a five-star hotel to be operated by the Four Seasons chain with 215 rooms and measuring 26,000 m2.

To achieve this, all of the buildings need to be joined up and to make that possible, Madrid’s Town Hall (PP) changed the protection in place on some of the buildings a few months ago. Specifically, it reduced the ‘Building of Cultural Interest’ protection to the front bay (crujía) and roof of the building at Canalejas, 1 and the front bay (crujía) and patio at Alcalá, 14; it also reduced the protection on all of the buildings to confine it to the façades.

Suspension of the building work

And it was the work performed on the front bay (crujía) between Calle Alcalá, 14 and Plaza de Canalejas, 1 that led to the stoppage of the works, as the Town Hall considered that protected pillars, slabs and stairs had been demolished…Nevertheless, sources linked to the project say that all of the work has been performed in accordance with the scope of the licences granted. The rest of the works – which affected 90% of the complex – have continued in the meantime, in accordance with the licences obtained.

In order to resume the suspended work, the planning experts consulted say that the licence for the next phase of the work needs to be granted, i.e. the licence for the new construction work. And for that to happen, the construction company must legalise their actions. The creation of a technical committee could accelerate the process, whereby leaving the final decision in the hands of professionals and not Madrid’s Town Hall.

It is worth remembering that Canalejas, along with other projects such as Operación Chamartín, Campamento and the shopping centre that is planned for Madrid Río, are coming under the spotlight of the new mayoress, Manuela Carmena, who is now less critical of these projects than she was in her electoral program. Carmena recently met with Antonio Béjar, the head of the Distrito Castellana Norte project, and promised that she would evaluate the most important urban planning project in the capital.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Mandarin Oriental Enters The Bidding War To Buy The Ritz

12 February 2015 – Cinco Días

A new chapter has begun in the bidding war to buy the Ritz in Madrid, one of the most emblematic hotels in the capital. The property has been on the market for almost two years, but may have a new owner in a matter of days. Mandarin Oriental, one of the largest Asian luxury hotel chains, has set its sights on the hotel, which is currently controlled by Orient-Express and Omega Capital, the investment company owned by Alicia Koplowitz.

The owners of the Ritz have been looking for a buyer for the property for almost two years, which, despite its prime location and the power of its brand, has lost much of its appeal in recent years, due to a lack of investment. This has meant that all of the operators that have shown an interest in acquiring the property have identified the need to undertake a major refurbishment, which has played against a quick sale.

Despite that, Orient-Express, now known as Belmond, and Omega have remained steadfast in their price expectations, which led Marriott to placing an offer for €130 million on the table; the transaction fell through at the last minute, when it seemed like every blessing had been given. The problem was that, by adding the purchase cost to the amount required to reform the property, the buyer considered that the final result was infeasible.

Fairmont took over the reins in the bidding process during the second half of last year, by offering €120 million for the property, whose refurbishment it valued at around €60 million. The luxury hotel chain analysed all kinds of options to try to close the transaction successfully, ranging from reselling the rights of the Ritz brand to Marriott – which would have allowed its rival to use the brand throughout the Iberian Peninsular – to addressing the possibility of operating the asset under its second brand, Raffles.

But, according to several market sources close to the negotiations, Fairmont has now also withdrawn from the bidding, leaving the way open for Mandarin. The Asian player may end up closing this complex transaction, mediated by JLL, through an agreement whereby it takes on a management role, but which, in any case, will allow the Asian chain to establish itself in Madrid, a market that it has been analysing with much interest for over a year.

After acquiring numbers 38 and 40 on the exclusive Paseo de Gracia in Barcelona, overlooking Casa Batlló, the Hong Kong firm opened its first property in Spain at the end of 2009. With this investment now well established, the Asian hotel chain has plans to grow in the country, both in Barcelona and, above all, in Madrid.

Luxury hotels arrive in Madrid

The emergence of Four Seasons in the capital, which has reached an agreement with OHL Desarrollos to open the luxury Canalejas complex, has been a catalyst for the Madrilenian hotel market. The large international chains have set their sights on the city and deals are expected to be signed for properties such as the Hotel Villa Magna, the Hotel Miguel Ángel and the old headquarters of Asturiana de Minas; without forgetting the Edificio España, which was acquired by the Chinese Group Dalian Wanda.

These deals will follow others agreed in the last few months, such as the opening of Barceló’s four star hotel in the Torre de Madrid, the conversion of the Hotel Asturias into a boutique hotel and the transformation of the historical Tio Pepe building into a 5 star hotel.

Omega Capital and Belmond acquired the Ritz twelve years ago for €125 million. The strong impact of the economic crisis on the hotel sector in the capital, with declining tourist numbers and low prices, in addition to the cost of the pending renovation of the emblematic hotel, has taken its toll on the brand, for which an impairment loss of €12 million was recorded in 2013, the last full period for which official results are available.

Original story: Cinco Días (by R. Ugalde)

Translation: Carmel Drake

Villar Mir Raises €268 Million Funding For Canalejas Project

29/12/2014 – Cinco Dias

The Villar Mir and OHL Group closed Canalejas Project financing by signing a credit agreement for a maximum amount of EUR 268 million, making it the largest financing operation granted to a real estate development project in Spain over recent years.

Specifically, funding has been signed-on for a period of 10 years – 3 years of construction and 7 of exploitation, according to the company.

This transaction involves a group of Spanish and foreign financial institutions: Banco Santander, CaixaBank, Banco Popular Español, which have acted as mandated lead arrangers in addition to Bankinter, Unicaja Banco, MoraBanc Group, Inmomutua Madrileña and Generali Insurance and Reinsurance.

The Canalejas complex, developed by the Grupo Villar Mir, in a landmark location in Madrid will employ about 4,800 workers and reach an annual sales volume of nearly €200 million.

The project, which seeks to promote urban renewal of the iconic area in downtown Madrid also entails the opening of the first hotel of the Canadian luxury chain Four Seasons in Spain.

The 5-star luxury hotel will have an area of 26,000 sq. m, 215 rooms, banquets and meeting halls, 2 restaurants, a spa, gym as well as an indoor swimming pool. It will also feature between 28 and 30 residences for sale, spread over a total area of 6,000 sq. m.

Canalejas will also feature a shopping mall of 16,000 sq. m. over 3 storeys and an underground parking lot. All this will be complemented with an underground bus station on Calle Sevilla and refurbishment of the existing parking lot, which will be carried out by the City.

The purpose of this complex is to rehabilitate the historic downtown of Madrid and make use of 7 contiguous properties located on Calle Alcalá, Calle Sevilla, Plaza de Canalejas and Carrera de San Jerónimo. Having remained unoccupied for 10 years and some of them dating back to 1887, the properties were sold to Villar Mir Group from Banco Santander in a €215-million transaction.

Since they were acquired in December 2012, restoration work on various protected structures have been carried out as well as interior demolition and facade cladding works.

With respect to protected structures, there are over 130 listed elements of carpentry, locksmith’s works, stonework and stained glass windows. They will be restored and relocated in the future project to be fully operational in 2017.

The Canalejas project involves an important job creation feature. In the construction phase, from 2013 to 2017, 600 direct and 1,200 indirect jobs will be generated. The operational phase is expected to create over 3,000 direct or indirect jobs – 1,200 in the hotel and 1,800 in the shopping center.

Original article: Cinco Dias (by EFE)

Translation: Aura REE