Tag: Four Seasons

KKH Capital Buys ‘Art Montfalcó’ Building In Barcelona For €24M

13 November 2017 – Eje Prime

New investment operation in the heart of Barcelona. In the midst of the political uncertainty, the real estate market is remaining active. The group KKH Capital has just acquired the Art Montfalcó building, located in the heart of the historical centre of Barcelona, for almost €24 million, according to market sources. The investment fund Medcap Real Estate and the real estate group Castmor had also submitted bids for the property.

The KKH Group has acquired the property through its parent company. Moreover, the company also operates in the real estate sector through KKH Property, a joint venture formed by KKH Capital, the investment group controlled by the former CEO of Renta Corporación, Josep María Farré, and Perella Weinberg, which participates in the partnership through one of its opportunistic funds.

The building, baptised as Palau Castañer in 1906, has been sold by the Güell family; it is currently leased to the Art Montfalcó souvenir shop. The surface area of the property is 2,000 m2. According to the same sources, the objective of KKH Capital is to renovate the retail premises and negotiate with a new operator (…).

KKH Capital, which specialises above all in residential assets, will add this property to its portfolio. The group, through KKH Property, has been acquiring assets over the last few years, including some as iconic as the Deutsche Bank tower in Barcelona, located at number 111 Paseo de Gràcia, which it bought from three Andorran families (the Reigs, the Ribas and the Cerquedas) for €90 million.

After negotiating with the hotel chain Four Seasons, the group has leased that building (the Deutsche Bank tower) to Seat. In total, it will comprise 2,600 m2 spread over four floors: a basement, ground floor and two upper floors. The store will not be a typical concession, but rather is looking to become a point of reference for the city. It will include a gastronomic space and a coworking area, whose features have not yet been defined.

The establishment will open at the end of 2018. KKR will undertake a major renovation of the building, for which it will engage the architecture firm OAB, led by Carlos Ferrater, author of the Olympic Village in Barcelona and the Catalunyan Palau de Congressos, amongst others.

One of its other most recent acquisitions is the Monte de Piedad building, located in Madrid. In that case, the group reached an agreement with the Fundación Montemadrid at the end of last year to buy the property for around €80 million. KKH’s plans for that property involve converting the asset into a luxury hotel.

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

Centro Canalejas’ Luxury Apartments Will Be Sold For c. €13,000/m2

4 November 2017 – Expansión

Centro Canalejas, located just a stone’s throw from Puerta del Sol, in the heart of Madrid, will open its doors at the beginning of 2019. It will house the first hotel to be operated by the Canadian luxury chain Four Seasons in Spain, as well as high-end homes, which will be sold for an average price of €13,000/m2. Moreover, it will include a shopping arcade on the lower floors and a 400-space parking lot.

The complex, promoted by OHL Desarrollos, Grupo Villar Mir and Mohari Limited – a company controlled by the Israeli businessman Mark Scheinberg– will unify seven historical buildings, some of which were constructed at the beginning of the nineteenth century, into a single unit, involving an investment of €525 million.

A luxury hotel operated by Four Seasons will occupy the majority of the space in the centre. Specifically, the hotel will have 200 rooms, whose surface areas will range from 45 m2 to 400 m2. They will occupy the entirety of the second, third, fourth and fifth floors, although the hotel will have a presence throughout the whole building. It will have 4,200 m2 of common areas as well as a spa, banquet halls and meeting rooms, one of which will have capacity for 600 people. Moreover, it will have two restaurants, one on the first floor, measuring 400 m2, and another on the seventh floor, measuring 425 m2.

Exclusive homes

The complex will also contain 22 exclusive homes with surface areas of between 150 m2 and 700 m2 for one of the penthouses, which will include a 350 m2 terrace. The homes, which will be located on the upper floors of the building, will be sold for an average price of €13,000 /m2.

“We have not started to market them yet. We obtained the definitive licence in July and we expect to start work in November, but several interested parties have already approached us”, explained Francisco J. Meliá, CEO of Centro Canalejas Madrid and Director General at OHL Desarrollos, the company responsible for developing the project.

Flagship development

Moreover, the centre will have a shopping arcade, measuring 15,000 m2, spread over three floors. The retail space will house luxury fashion and accessories brands, as well as gastronomic offerings.

The property developers and those responsible for the development have highlighted the architectural challenges involved in adapting the buildings to their new uses whilst respecting their heritage value and they underlined that more than €7 million has been invested in the conservation of 16,700 pieces.

“Centro Canalejas is going to be a flagship development in Madrid and not only because of its ocean liner shape”, explained the architect Carlos Lamela, Director of Estudio Lamela and author of this architectural project.

Original story: Expansión (by Artur Zanón and Rebeca Arroyo)

Translation: Carmel Drake

Hyatt To Open Its New 5-Star Hotel In Madrid In December

6 November 2017 – Cinco Días

Nine years after it stopped managing Hotel Villa Magna, the North American hotel chain Hyatt, is finalising its return to Spain and will benefit from first-mover advantage in the battle between the luxury hotels in Madrid. It will be the first to open, but close behind it will be followed by the five-star Four Seasons hotel in Canalejas, the four-star RIU hotel in Plaza de España and the five-star Starwood hotel in the former Hotel Asturias.

The hotel will be located in the heart of Gran Vía, will have 159 rooms (of which 10% will be suites with views over the iconic street) and will be very focused on tourists with a high purchasing power. Gonzalo Maggi, Director of the hotel, highlights that it will be the first hotel to operate under the Centric brand in Europe. “The main features of the brand including being at the centre of the action. We are targeting clients who want to explore, get to know the city and discover new things and who want to use the hotel as a launch pad for their stay”, says Maggi, who admits that the building work is being accelerated to ensure that the hotel will be ready to open in December to take advantage of the Christmas rush.

Maggi defines the client that his hotel is targeting as “lifestyle”, which serves, in his opinion, to differentiate its offer from those of the other operators that are going to compete with Hyatt. “We are going to target people who place a lot of importance on design, fashion, the people they share space with and the gastronomy they seek. We are going to position ourselves in the high-end segment. Of the scale of traditional five-star hotels, we are going to aim a bit lower, but in the highest range of the new establishments”, he says. Another feature of the chain is the food. “We are going to have a music studio in the hotel lobby specialising in vermouths, a restaurant with international food and a rooftop bar, which will open in the first quarter of 2018”, he says (…).

The Director of the Hyatt Centric forecasts that to start with, 40% of the hotel’s clients will come from the USA, where the brand has been established for 60 years and is very well known. The rest will come mainly from three European countries (France, Germany and the UK) as well as from certain Asian countries. Maggi does not rule out that the hotel will also spark interest in the domestic market, despite its high prices, given its good location.

The director of the hotel highlights that Spain represents a very interesting market, as shown by the opening of the Park Hyatt in Mallorca a year and a half ago, although he is sure that the main opportunities are in Madrid and Barcelona (…). Asked about the hotel moratorium, he says (…) “as soon as they let us build there, we will launch ourselves into that market. It is a fantastic city and has a great deal to offer”, he says.

Original story: Cinco Días (by Carlos Molina)

Translation: Carmel Drake

Hyatt Wants To Grow In Spain & Places Its Focus On Madrid & Barcelona

24 October 2017 – Expansión

All of the stars are aligned for Hyatt’s return to Madrid. After almost a decade away, the US chain will return to the capital at the end of the year, with what will be its second hotel in the country, following the opening of Park Hyatt Mallorca in June 2016. What’s more, it is looking for new opportunities to strengthen its presence in the country, according to Gonzalo Maggi, Director General of Hyatt Centric Gran Vía Madrid.

For its debut in the capital, the luxury hotel group has chosen the building at number 31 on Madrid’s iconic Gran Vía. The building is owned by the Mexican family group Exacorp, and used to house the legendary Zahara coffee shop and the famous lottery office of Doña Manolita.

“Hyatt wants to continue investing in Spain. We do not have any specific projects under consideration at the moment, but we are looking for opportunities to continue growing in the country”, said Maggi, who mentions Madrid and Barcelona as the places where the group is placing its focus when it comes to strengthening its presence.

At the end of July, the multi-national owned 731 hotels around the world, and it has opened one hundred establishments in the last year alone.

In terms of Madrid, the chain, which managed Hotel Villa Magna for almost two decades until 2008, has this market on its radar. “We think that it is a very important city in Europe. Since we left Madrid, we have been trying to return, but we weren’t able to find any project that was worth it until now”, he said.

“Hyatt has 13 brands and we are considering which ones fit with this market. In addition to Centric, the Regency brand could suit the city”, he added.

With its arrival on Gran Vía, Hyatt will be the first in a long line of international luxury chains, such as Four Seasons and the Aloft and W brands – from Starwood – , that are going to arrive in the centre of Madrid over the next few years: “One of the advantages we have over the competition is that we are going to be one of the first to arrive on Gran Via in the five star segment. Our product will be distinctive all by itself. It will serve as a starting point for visitors to explore the city and as an icon for leisure in the local market”.

Timetable

The Hyatt Centric Gran Vía, with 159 rooms, will open its doors in December and will have 88 employees. The establishment will have a rooftop terrace, which will be inaugurated a few months later, probably in the spring of 2018.

The owner of the building, which used to be leased as office space, spent €30 million renovating the asset, which Hyatt wants to turn into a flagship property for its Centric brand in Europe. The hotel’s features will include a vermouth bar, Ondas, with a design that imitates that of a music studio, and an Ice and Coal restaurant, with a local gastronomic offering.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Cordish, the Last of the Big Failed Real Estate Projects

07 August 2017

Eurovegas, Operation Campamento, the Four Seasons of Barcelona and the Hyatt hotel project in the Torre Agbar are some of the most famous unsuccessful investments in Spain.

They were destined to occupy prominent positions in the ranking of mega real estate projects but were doomed to failure, even before starting out. Failure to comply with regulatory requirements, bureaucratic obstacles and clashes with the relevant authorities have been some of the factors that have caused the failure of multi-million-dollar investments planned by, among others, the North American group Cordish, the Chinese giant Wanda, the American magnate Sheldon Adelson and projects by the multinationals Four Seasons and Grand Hyatt in Barcelona.

The last project to flounder has been Cordish’s. The Baltimore-based group wanted to build a leisure and gambling complex in the Madrid municipality of Torres de la Alameda. But the Madrid Autonomous Community has rejected the proposal under the Integrated Development Center (CID) not once, but twice, considering that the project will not impact the economy, employments levels and culture sufficiently, while also questioning the project’s feasibility.

Cordish’s truncated plan joins Eurovegas, the ill-fated gambling complex that American Sheldon Adelson intended to build in Alcorcón, the Gran Scala fiasco in the Los Monegros desert and the mirage of The Kingdom of Don Quixote in Ciudad Real.

Another of investor that has accumulated bad experiences in Madrid is the Chinese giant Wanda, which owns 20% of Atletico Madrid. The conglomerate, led by the tycoon Wang Jianlin, announced three years ago its intention to invest at least 3 billion euros in a high-end complex with up to 15,000 luxury dwellings in the former Campamento barracks in Madrid owned by the Ministry of Defence. In addition, the urbanization plan included a commercial complex, theme parks and casinos. The Chinese group, however, gave up its plans when faced with land prices it considered exorbitant. Months later, another of Wanda’s star projects in Madrid went up in smoke. The group, which had bought the Edificio España from Santander for 265 million in 2014, decided to put it on sale after disagreements with the Madrid City Council, which required the conservation of the front and side facades, as established by the law on protection of historic buildings.

Vetoes

Hotel investments have suffered a setback in Barcelona as well. Suspended licenses have caused large international chains to withdraw from their projects in the City of Barcelona.

In particular, the arrival of the hotel brand Four Seasons in Barcelona was truncated by a municipal veto. KKH Property Investors paid 90 million euros for the Deutsche Bank building, located at the intersection of Barcelona’s Avenida Diagonal and the Paseo de Gracia. KKH was seeking the demolition of the building, to subsequently build a larger building, to be run by Four Seasons. But the project collided with the then activist Ada Colau, who turned the rejection of the project into one of her electoral promises. Her election to the Barcelona City Council in the summer of 2015 cut short KKH’s plans, which has chosen instead to rehabilitate the old office building and convert it into high-end residential housing. Four Seasons, which will land in Madrid in early 2019 at the Canalejas complex, is still looking for locations in the city.

Another of the big international hotel chains that could have come to Barcelona was Hyatt. In 2013, fund manager Emin Capital, led by Andorran Jordi Badia, announced that it had bought the Agbar Tower for 150 million euros and was preparing to convert it into a luxury hotel that would be managed by the US hotel chain. Three years later, the project had still not been approved and the asset was finally sold to Merlin Properties, which will maintain it as an office building and hope that it will become the headquarters of the European Medicines Agency (EMA).

Original Story: ProOrbyt Expansion – Rebeca Arroyo/Marisa Anglés

Translation: Richard Turner

Four Seasons Arrives In Madrid With Suites Costing €12,000/Night

21 July 2017 – Expansión

At the beginning of 2019, when the 22 luxury homes are completed in the Canalejas Complex, the Four Seasons hotel will also open its doors. It will be the famous Canadian chain’s first establishment in Spain.

The hotel will contain 200 rooms, the smallest of which will have a minimum surface area of 45 m2 (a standard room) and the largest of which will span 400 m2 (the Presidential and Royal suites). “From the start, we were clear that the ideal brand for Madrid was Four Seasons. The city does not have any major luxury hotel operators, whereas Paris and London have 15 or 20”, explained Francisco Meliá, CEO at OHL Desarrollos.

The hotel is being designed by the team at Lamela Arquitectos (which is taking care of the entire project to restore the complex) and the US interior design studio Bamo. “Four Seasons estimate that around 65,000 people per year will visit the hotel”, said Meliá. “The brand did not have any hotels in Spain and so this is a very important milestone for it. In fact, the firm is now looking at other locations in Madrid and Marbella”, he added.

The objective of Four Seasons Canalejas will be to take advantage of the tourism that already comes to Spain, but also to attract a new luxury audience, says Meliá. “Four Seasons has a unique service culture. For example, there will be a ratio of two employees per room. Moreover, the staff receive unique training so that they never have to say no to a client”.

The rooms at the Four Seasons will be the most expensive in Madrid (currently, that record is held by the Villa Magna). “The hotel prices will range from €500 for a single room to €12,000 for a suite, per night.

In addition to the 200 rooms, the hotel will house two restaurants, an indoor swimming pool and a spa. “In the case of the restaurants, the staff serving will be employed by Four Seasons but we are talking with high-profile operators both from Spain and overseas regarding the management of the restaurant, given that the intention is for these restaurants to be set a new benchmark in the city, both for tourists and Madrilenians”, said Meliá.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

KKH Has Spent €500M+ In Spain & Wants To Invest More

17 July 2017 – El País

After the abrupt collapse of the real estate sector following the burst of the bubble, it was five years before capital returned to the industry. And it did so five years ago, when the recovery in the sector was based essentially on investment funds with foreign names, which bought anything ranging from portfolios of properties from the administrations to buildings that were weighing down heavily on the banks. One of the funds that arrived then was the KKH Capital Group. Rather it made its return to Spain then.

The instrument was led by the person who until 2007 had been the CEO of Renta Corporación, Josep María Farré. He returned to Spain after a six-year break with the intention of building a portfolio of properties exceeding €300 million. Five years later, and after joining the US fund Perella Weinberg, the resulting alliance, KKH Property Investors has now spent €500 million and is considering expanding its financial muscle to continue acquiring buildings.

After undertaking acquisitions in Barcelona and the Balearic Islands, KKH recently entered the Spanish capital. There, it purchased the former headquarters of the Caja Madrid Foundation, in Plaza de las Descalzas, which it is going to convert into a 170-room luxury hotel. The building, which has a surface area of 25,000 m2, spread over seven floors and another two parking floors, could be operational by 2019 (…).

Buying and renovating

This acquisition fits perfectly into the company’s business model, which, unlike other funds, does not just sit back and wait for its properties to appreciate in value, but rather seeks to increase their value through renovation and, in most cases, changes of use. On paper, the model is similar to that employed by Renta Corporación, but sources in the sector highlight a significant difference: the real estate company used to try to hold onto properties for the shortest time possible. When the crisis hit, that logic became impossible.

The same operation that it undertook in Madrid – the transformation of a property into a large luxury hotel – was frustrated in Barcelona with the election of Ada Colau as mayor of that city. The group had acquired the iconic Deutsche Bank building, on Paseo de Gràcia, for around €90 million, according to market sources. That establishment was going to be managed by Four Seasons and was going to be another magnet to attract new investment to the area. In parallel, KKH was developing other hotels in the city. For example, it is still planning to open an establishment close the Santa Caterina market, under the Edition brand from Marriott International and the businessman Ian Schrager, by the end of this year.

Not in vain, hotels are one of the most sought-after assets at the moment, given the pull of the tourist sector. According to the consultancy firm CBRE, last year, investors spent €1,706 million on these assets in Spain after a record year in 2015, when they spent more than €2,000 million.

Nevertheless, when Colau’s team came to power, KKH withdrew from the hotel after her party opposed the project during its campaign and decided to build luxury apartments in its place. Barcelona’s new hotel plan, which prohibits new openings in the centre, has forced the fund to shift its focus. “New hotel projects in Barcelona are complicated. The areas where they can be built are not ideal for such use, but we have the vocation to continue operating in the city. We will adapt to the political situation and I am sure that we will continue”, said Enric Venancio, CEO at KKH. He added that besides Madrid, another key destination for the firm is Ibiza, where it started work last year on the construction of a luxury establishment.

In addition to hotels and luxury homes – (…) this fund has a third string to its bow, in the commercial segment. In an unprecedented operation in the Catalan capital, the fund is immersed in the conversion of the former Montecarlo hotel, on La Rambla, into a commercial space. (…).

Original story: El País (by Lluís Pellicer)

Translation: Carmel Drake

Poker Stars’ Founder Pays OHL €225M For 50% Of Canalejas

11 April 2017 – Expansión

Grupo Villar Mir has completed the sale of 50% of Project Canalejas, the luxury home, hotel and shopping complex that it is developing in a set of historic buildings in the centre of Madrid, to the Israelí businessman Mark Scheinberg, founder of the online poker firm Poker Stars, for €225 million, according to a statement filed yesterday by OHL with Spain’s National Securities and Exchange Commission (CNMV).

The corporation owned by Juan Miguel Villar Mir is developing this project in conjunction with its listed construction company OHL. Both entities have sold part of their respective stakes in accordance with the percentage that they control and as part of the asset sales plan that they have in place to cut their debt. Specifically, Grupo Villar Mir has sold 32.5%, and has whereby reduced its stake in the project from 65% to 32.5%. Meanwhile, OHL has sold another 17.5%, which has reduced its shareholding from 35% to 17.5%.

OHL reported yesterday that it will record revenues of €78.75 million from the sale of its stake in the complex, and that it has already received €73.5 million, leaving an outstanding balance due of €5.25 million. The company explained that the outstanding balance will be paid in two instalments: one in December this year, amounting to €1.75 million, and the other (€3.5 million) will be received when the project is commissioned.

Grupo Villar Mir and OHL, which have recorded a combined gain of €82.85 million from this operation, will retain control over the management of the project until it is commissioned, scheduled for the beginning of 2019. Canalejas is developing a group of seven historic buildings, which comprise an entire block in the centre of Madrid, next to La Puerta del Sol, which Villar Mir bought from Santander in December 2012 and which have a combined surface area of 50,000 m2.

The project involves the refurbishment of the properties, whilst retaining their architectural and artistic features, to house 22 luxury homes and a five-star hotel, which the chain Four Seasons has already committed to operating, in what will be its debut in Spain. The complex will also have a 16,000 m2 shopping arcade and underground car park.

Original story: Expansión (by E. M.)

Translation: Carmel Drake

50% Of Lagasca 99’s Luxury Homes Have Been Pre-Reserved

27 March 2017 – Expansión

A “unique” project, destined to become a “European and international architectural icon”. That is the ambitious challenge that the Socimi Lar España and the largest fund manager Pimco have set themselves in an unusual project for both partners, namely: the luxury residential building, Lagasca 99. Lar España and its largest shareholder purchased the company Juan Bravo 3 at the end of 2014. At the time, the company owned the plot of land at the address of its name, in the exclusive neighbourhood of Madrid.

The company had been created in December 2006 by the real estate company Eurosazor, controlled by the businessman Rafael Ortiz. Ortiz had wanted to construct the most exclusive development in the capital, inspired by the One Hyde skyscraper in London. Nevertheless, financial difficulties left Eurosazor and Juan Bravo 3 filing for bankruptcy and the project never got off the ground. Then, Lar and Pimco invested €120 million to acquire the plot of land (along with the loans linked to the company that owned that land) and, ten years later, and also with the support of the renowned architect Rafael de la Hoz, the development has now resumed with a novel concept.

The future property, which will have a constructed surface area of 26,203 m2, will contain 44 homes, compared with the 60 units that Eurosazor had planned, and the 55 that were initially proposed by the new owners. These homes, spread over nine floors plus penthouses, will be located at different heights, including duplexes with ceilings measuring more than five metres high and duplex penthouses measuring up to 700 m2, including terraces and private swimming pools.

The building, which will offer five different types of homes, will incorporate elements such as bevelled corners and shark fins on the windows, which will allow natural light to enter the homes whilst at the same time ensuring the privacy of residents. Each home will have a minimum surface area of 330 m2 and will be sold for around €12,00/m2, and up to €14,000/m2 for the most exclusive units, say sources in the sector. In addition, each property will include two or three parking spaces – Colliers International will be responsible for marketing the properties.

The buyers of these exclusive homes (pre-reservations already exist for 50%) will have access to a gym and indoor swimming pool, as well as a wellness centre and a rooftop garden with an outdoor pool and landscaped roof. The development is expected to be ready by the beginning of 2018.

Lagasca 99 will compete against homes in the Canalejas complex to become the most luxurious development in Madrid. Located next to Puerta del Sol, the project run by Villar Mir (which Mark Scheinberg has just acquired a stake in) will build around twenty luxury apartments. Their residents will have access to the services of the five-star hotel in the same building, which will be operated by the Four Seasons chain.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hyatt Returns To Madrid To Manage Hotel On Gran Vía, 31

10 March 2017 – Cinco Días

Hyatt is returning to Madrid. The hotel chain is coming back to the capital nine years after abandoning its role as the manager of Hotel Villa Magna. This week, the company has announced that it will manage the future hotel whose doors are going to open at number 31 Gran Vía, a property that is owned by the company Exacorp One, itself owned by the Mexican Díaz Estrada family.

The hotel chain will open an establishment there during the fourth quarter of this year, under the Hyatt Centric brand, according to a statement made this week by the firm. As such, it will become the first establishment to bear the hotel chain’s urban brand in Spain.

The future hotel will have 159 rooms, a restaurant called “Hielo y Carbón” (Coal and Ice) and a roof-top terrace, which will open during 2018. Jorge Díaz Estrada, Director of Exacorp, recognises that “the hotel’s central location, combined with its unique design, will attract business and pleasure travellers alike”.

In addition to this property, Díaz Estrada has entered Madrid’s real estate market with a bang in recent years with the purchase of several buildings. The most iconic property in its portfolio is Apple’s current flagship store in Puerta del Sol. In addition, the firm has acquired properties at numbers 25 and 27 Calle Montera.

Meanwhile, Hyatt’s return represents yet another boost for the hotel sector in the city. A real commitment from the international brands, which will be further strengthened by the arrival of Four Seasons in the Canalejas Complex and the W, which Starwood is going to open across the road. These establishments will encourage more international travellers and will, according to sources in sector, favour an increase in average prices for hoteliers.

In addition, a number of Spanish hotel chains have also strengthened their presence in the area in recent times. In this vein, Barceló has opened a hotel in Torre de Madrid, close to where Riu is expected to manage the future hotel in Edificio España. Meanwhile, NH, will open the doors to its new hotel on Gran Vía at the beginning of next year.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake