Tag: Four Seasons

The Alcaraz Family Buys Caja España’s Former HQ In Madrid

23 November 2016 – Expansión

Another new luxury housing development is going to be built in Madrid. The family office owned by the Alcaraz family has purchased the building located on Calle Velázquez 23 – which used to house the headquarters of Caja España – from Banco Ceiss, where it plans to construct luxury homes.

The financial entity, which was created as a result of the merger of Caja Duero and Caja España, has taken advantage of the increase in prices driven by the economic recovery in Spain and the lack of high quality products to sell this iconic asset, located in the heart of the Salamanca neighbourhood. The operation has been advised by Aguirre Newman.

The Alcaraz family plans to demolish the property and build a new residential development, but it will respect the façade and arquitectural value of the asset. Velázquez 23 has an above ground surface area of 2,548 m2, as well as 450 m2 of basement space, which may be used for retail purposes and parking.

This building is located on one of the most sought-after axes for the development of high quality residential properties, just a stone’s throw from the Retiro Park and Calle Serrano, which is home to lots of major luxury brands. The price of homes in this area exceeds €10,000/m2 in some cases.

Other developments

This project is the latest in a long line of luxury developments that are already on the market, such as the one on José Abascal 48, comprising 17 homes with a surface area of between 100m2 and 400 m2; as well as others that are underway at Juan Bravo 3 and Canalejas.

The former, now known as Lagasca 99, which is being promoted by the Lar Group, is located in the neighbourhood of Salamanca and is expected to be sold in 2018. Meanwhile, the group of seven properties in Canalejas, a project being undertaken by Inmobiliaria Espacio and OHL, is located between Calles Alcalá, Sevilla, Plaza de Canalejas and Carrera de San Jerónimo. In addition to a hotel and shopping arcade, the Canalejas plan includes 22 luxury residences, which will be operated by the Four Seasons chain, along with the hotel.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Edificio España Is Set To Become A Hard Rock Hotel

4 October 2016 – El Confidencial

The countdown to the launch of Trinitario Casanova’s project in Edificio España has begun. The businessman, who has reached an agreement with the Wanda Group to acquire the property, has been given the green light by the Town Hall of Madrid for his plans to convert the skyscraper into a Las Vegas style hotel.

Last Friday, the department of town planning, led by José Manuel Calvo, approved the request submitted by the Baraka Group, the Levantine businessman’s holding company. Its request involves turning the majority of the skyscraper into a large hotel, whilst retaining the protected elements.

With this approval, Casanova now has all of the pieces in place to seal his second major agreement of the year: a 30-year contract with Hard Rock, the hotel empire owned by the Seminole Indians, who have presented Baraka with a firm offer to take over the operation of the Madrilenian skyscraper.

Sources at the Spanish company have acknowledged that conversations are at a very advanced stage, in a process organised by JLL, but that the final rubber stamp still needs to be given. That milestone that will come once the legal representatives of both parties have been completed their corresponding reviews.

The Hard Rock project for Edificio España involves opening a five-star hotel containing almost 600 rooms. The property will be equipped with restaurant and entertainment offerings and will also contain large suites and allow for the use of the roof terrace.

In addition, the approximately 150 parking spaces that the skyscraper already has in its second basement are sufficient for the North American group’s plans. The future hotel will occupy 22 floors of the property, spanning around 67,400 sqm, given that Baraka has reserved the first three floors, covering almost 15,000 sqm, for a large shopping arcade and is, currently, holding conversations with several potential operators.

Hard Rock Hotel’s commitment to Spain

Hard Rock has been looking for a site on which to open a major hotel establishment in Madrid for years and the possibility of doing so on Gran Vía is an opportunity that it does not want to miss, given that this thoroughfare offer all of the leisure, history, shopping and cultural offerings that are demanded by the profile of international tourist that the chain attracts.

The arrival of Edificio España onto the market also comes at a particularly sensitive time for the North American company, which, after several years negotiating with Enrique Bañuelos over the construction of a resort in the BCN World project, has now been told that the Catalan Government has recalculated all of its numbers for the complex and so its future is up in the air.

In Spain, Hard Rock Hotel also holds a concession agreement with Palladium, the group owned by the Matutes family, for its properties on the Balearic and Canary Islands, where the group…owns the Hard Rock Ibiza and Hard Rock Tenerife.

Having received the favourable report from the Town Hall of Madrid, Trinitario Casanova now expects to complete the definitive purchase of Edificio España from the Wanda Group by the middle of the month, and he will then be able to begin the renovation of the property, which is expected to take almost two years.

With this calendar on the table, the future Hard Rock Madrid may open its doors at the end of 2018, which is when the Four Seasons hotel, currently being constructed in the Canalejas Complex, is also due to open. Canalejas is another of the most awaited and controversial developments in the capital, although it should receive its final blessing from Manuela Carmena’s team within the next few days.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Villar Mir Engages Colliers To Accelerate Partial Sale Of Canalejas

26 September 2016 – Expansión

Grupo Villar Mir, the controlling shareholder of OHL, is making progress with its aggressive divestment plan, through which it aims to reduce its own level of indebtedness, as well as that of the construction company, and solve the financial problems that it finds itself immersed in. To this end, the industrial holding company has accelerated the search process to identify an investor willing to buy some of the complex of Canalejas buildings in Madrid.

Specifically, the Villar Mir group, which controls the project through a holding company (75%) and OHL (25%) has engaged the real estate consultancy Colliers to analyse the sale of a minority stake in the Canalejas complex, the real estate project that it is currently developing in the centre of Madrid.

The aim is to analyse the proposals that various investment groups have submitted to the owner of OHL, to participate in the project, which is expected to require an investment of €500 million. “This analysis phase will be completed in October and only then will we be able to take a decision regarding the possible partial divestment, whilst retaining control over and our commitment to the project”, said sources at the company.

According to El Confidencial, a number of possible interested parties are presenting themselves as contenders, including the international funds TH Real Estate and Lone Star.

In any case, Villar Mir will retain a majority stake in the project, given that its intention is to sell a stake of between 30% and 49%.

At the beginning of 2013, Villar Mir purchased seven buildings from Banco Santander, located between Calles de Alcalá, Sevilla and Plaza de Canalejas, for €215 million. The complex will house a luxury hotel managed by the Four Seasons chain, around 20 homes associated with the hotel, a shopping centre covering 15,000 sqm and a 500-space car park.

Initially, Villar Mir hoped to open the complex at the end of 2016, but problems with the Town Hall of Madrid relating to the renovation work delayed the project and it is now not expected to open until 2018. The construction company has launched a comprehensive divestment plan. Its portfolio of assets available for sale include 7% of Abertis, the industrial division, and the Mayacobá Mexican hotels. (…).

Original story: Expansión (by C. Morán and R. Ruiz)

Translation: Carmel Drake

Irea: Hotel RevPAR rose by 12.7% In Madrid In 2015

14 July 2016 – Expansión

Tourism in Madrid is booming and recording some good results, both in terms of demand and the operating profit of hotels in a destination that was particularly affected by the crisis. In this way, the upwards trend in hotel profitability, which began in 2014, is expected to continue for the next few months. According to a report prepared by Irea, the city of Madrid, which recorded a 12.7% YoY increase in average revenue per available room (RevPAR) in 2015, to €59.70, may see room rates return to their pre-crisis levels within the next twelve months.

The profitability of the hotel market in the capital, which closed 2008 with a RevPAR of €66, suffered from a decrease of almost 30% since the start of the crisis, but has been gradually recovering over the last two years.

In this vein, RevPAR grew by 2.8% during the first five months of this year to amount to €62.40.

In terms of demand, although occupancy rates continue to rise, the cumulative growth during the five months to May was 2.3%, compared with more accelerated growth during 2015. The main reason for this moderation (in growth) is that the International EAU Meeting has not been held in Madrid this year, since it is a bi-annual event.

Looking ahead to the next few months, hotel operators estimate growth of around 10% in terms of overnight stays during the summer season compared with last year.

Investor interest

The recovery of the hotel market in Madrid since 2013 is appealing to investors, who expect the recovery to continue into the medium term. The entry of new international hotel chains, such as Four Seasons, W and Hilton, as well as initiatives being carried out by the Town Hall to regenerate and pedestrianize the city centre, will continue to boost the recovery of this destination, according to Irea.

As a result, Madrid, unlike Barcelona, is continuing to generate interest amongst international investors, as evidenced by operations such as the purchase of Hotel Villamagna by the Turkish conglomerate Dogus Group and the sale of Hotel Suecia.

The shortage of products in Barcelona – Madrid’s main competitor – and the moratorium in the Cataluñan capital mean that Madrid is the most active investment market at the moment and the preferred target for domestic and international funds and family offices.

During 2015, investment in the hotel market in Madrid amounted to €582 million, compared with €163 million in 2014.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake

Meridia Capital Considers Creating A Hotel Socimi

21 January 2016 – Expansión

The fourth investment fund that Meridia Capital is going to launch will specialise in the acquisition of urban hotels and may be a Listed Real Estate Investment Company (Socimi).

The founder and CEO of the fund manager headquartered in Barcelona, Javier Faus, said at a forum organised by Exceltur in advance of Fitur that “there is capacity in Spain to have three or four Socimis specialising in the hotel sector”. “And not only in the holiday segment”, said Faus, referring to the only pure hotel Socimi in operation in Spain at the moment, namely, Bay, which was created last year as the result of an alliance between Barceló and Hispania. Faus acknowledged that Meridia is currently analysing whether its fourth fund “could be a hotel Socimi”.

“The final decision still needs to be taken, and although that will not happen for a few months, it will be taken in 2016”, he said. The CEO of Meridia also said that the new vehicle will specialise in urban hotels, although the firm still needs to decide whether it will lease or manage these properties and whether or not it will build up a multi-brand portfolio, containing hotels from various chains. Faus added that he has not yet started talks with any hotel group.

Nevertheless, he is very clear about the location of the assets: Madrid and Barcelona, “although the fund may allocate between 15% and 20% of its resources to investment in other countries”, he added.

Investors

The strong interest in Spain from the international markets is helping the Spanish Socimis, which are consequently not facing much difficulty when it comes to raising capital. The urban hotel segment continues to be one of the most attractive, given the strong performance of the tourist sector in Barcelona and the significant recovery that the business sector is experiencing in Madrid.

In fact, experts in the real estate sector say that the biggest problem at the moment is finding assets available for sale, although in the hotel sector the willingness of the large hotel chains to sell buildings and continue leasing and managing them (sale & leaseback) may represent an opportunity for the Socimis, which for the most part, are looking for assets that they can lease.

This would be Meridia’s fourth fund and it may be created almost in parallel to the third, which is currently being established and which is focusing on investment in real estate assets in general. Faus expects that the third fund will raise capital amounting to €250 million, mainly from institutional funds in the US and Europe, but also from insurance companies. Together with bank financing, he expects that it will invest around €600 million.

The previous fund, Meridia II, invested €400 million between 2014 and 2015, of which €150 million came from investors and the rest from bank financing. The first fund launched by Faus, in 2007, was devoted entirely to the hotel sector, and as such the Socimi that he is considering creating now would not be new territory for him. That first fund acquired hotels outside of Spain, operated by a variety of hotel brands. They included the Hotel Ritz-Carlton and the Crowne Plaza in Santiago de Chile, the Four Seasons in México DF, the InterContinental in Sao Paulo and the Hotel W París Ópera, as well as a stake in three resorts in Thailand operated by Six Senses (…).

Original story: Expansión (by Y. Blanco and M. Anglés)

Translation: Carmel Drake

Starwood Will Open ‘W Madrid’ In 2018

20 January 2016 – Cinco Días

Starwood’s W brand will soon arrive in Madrid. Yesterday, the hotel chain announced that it will open the doors of a new hotel in the capital in 2018, in a property that is across the road from the Four Seasons hotel, which will itself open in the Canalejas complex currently being developed by Villar Mir. The arrival of the W brand represents another boost for the city’s luxury hotel market…and for Spain, which will thus become the only country in Europe to have two hotels operating under the brand.

“The opening of a second W hotel in Spain demonstrates the significant demand for this innovative lifestyle brand in such an important tourist market”, said Michael Wale, President of Starwood Hotels & Resorts for Europe, Africa and the Middle East, in a statement.

The future hotel will be located in the former Hotel Asturias, at numbers 9 and 11 on Carrera de San Jerónimo, which used to be operated by the company Hispano Hotelera, until September 2014. The two buildings that comprised the hotel, which used to be owned by the Salazar family, the former owners of SOS, were then sold to Platinum Estates, the investor vehicle of the Indian textile businessman Harry Mohinani, for more than €30 million. However, the properties currently belong to Merryland Inversiones, a company created in June 2014, which last year completed a €3.45 million capital increase and which is controlled, in turn, by Multiway Investment Limited Hong Kong.

“We think that the W brand fits perfectly with this historic property and we look forward to the emergence of W Madrid as one of the most sought-after and admired hotels in Spain”, said Harry Mohinani, the CEO of Merryland Inversiones.

Initially, the idea was to convert these buildings into luxury apartments, but in the end, the owners opted for a luxury hotel. The Starwood chain has been chosen to take over the new facility and it will represent the W brand’s first foray into the capital, since to date in Spain, its only presence is in Barcelona.

The new hotel will have 141 rooms, of which 21 will be suites. The future W Madrid, which will join the portfolio of 46 hotels that are already in operation around the world, will also have a rooftop terrace and two meeting rooms. The refurbishment of the property will be coordinated by the company Hospitality Solutions, which is headquartered in Hong Kong; the architectural firm Rockwell Group will also be involved – it has offices in Madrid and participated in the renovation of some parts of the Westin Palace, the only hotel that Starwood currently operates in the city. (…).

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake

Hilton To Open Hotel In Centre Of Madrid

11 November 2015 – Expansión

The US giant is set to debut its Double Tree brand in the heart of the capital, with a 61-room hotel on Calle San Agustín, which the Pérez Gil family will manage under a franchise agreement.

Hilton is joining the hotel battle in the centre of Madrid. The US group will debut its Double Tree brand in Madrid in 2016, with a hotel in the tourist centre of the capital.

Specifically, it will open a hotel in a building that currently houses offices on Calle San Agustín, Madrid. This building is owned by the Pérez Gil family, which also owns several other hotels in Madrid. The owner will take responsibility for the renovation of the building and will manage the four-star hotel under a franchise agreement.

Hilton, whose only presence in the capital until now has been near the airport, is moving into the centre to compete against Four Seasons and Mandarín, which are preparing to open hotels of their own in the Canalejas complex and in the Ritz, respectively. The US chain also participated in the bid to manage the Hotel Miguel Angel, but in the end that contract was awarded to Bluebay.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Refurb Of ‘Palacio de Congresos’ Will Cost €90M

13 October 2015 – Cinco Días

Turespaña, which forms part of the Ministry of Industry, has now prepared a feasibility study for the renovation of the Palacio de Congresos de la Castellana. It calculates that the project will cost €90 million and it lowers the height of the adjoining luxury hotel.

The Ministry of Industry calculates that the building work to renovate the Palacio de Congresos de la Castellana in Madrid, and to construct a new hotel with more than 200 rooms, will cost around €90 million and will take approximately three years to complete, whereby generating subsequent employment (directly and indirectly) for more than 600 people.

Those are the findings of the feasibility study that Spain’s Institute of Tourism (el ‘Instituto de Turismo de España’ or Turespaña) has made available for public consultation over the next two months (until 7 December). Its intention is to convince potential investors, which will have to cover the construction costs of the project, in exchange for a concession to operate the complex, about the benefits of the project.

The venue first opened its doors in 1971 and closed them for the last time at the end of 2012, after shortcomings were detected in terms of fire safety and general security, which forced it to undertake a comprehensive renovation of the building. Nevertheless, Turespaña acknowledged that it did not have sufficient funds to undertake this investment and that it must turn to the private sector.

The project will be awarded as a 40-year concession agreement, with an annual fee of approximately €1.25 million. According to the document, the work to construct the new five-star hotel will cost almost €22 million. The Ministry of Industry expects that a new 17-storey tower will house the luxury hotel (six floors less than initially envisaged by the public body). The project must retain the building’s main façade, as well as the façade that looks onto the Paseo de la Castellana, which has displayed a Joan Miró mural since 1980 – the mural is expected to be restored at a cost of €450,000.

Five-star hotel

The aim is to have a five-star hotel with 180 double rooms and 36 junior suites, as well as an executive lounge, gymnasium, swimming pool complex and spa.

The document also includes a forecast for investors about the future operating profits of the complex – it predicts an EBITDA of €7.88 million in the fifth year – the first four years relate to the development phase – and an EBITDA of up to €16.78 million in the final year of the concession. (…).

The next step to be taken by whoever wins the public concession will be to request a building permit from the Town Hall.

Madrid has great potential

The Executive encourages potential investors to participate in the project thanks to Madrid’s “significant growth potential” in the area of business tourism. It also presents other arguments in favour of the project, such as the proximity of the site to the Santiago Bernabéu stadium and the lack of other five-star hotels in the capital, where the Four Seasons hotel chain is hoping to open a hotel in the Canalejas Complex that OHL is currently building.

The Government’s hypothesis is that 65% of the revenues will be generated from conventions, meetings and exhibitions, compared with 20% from the business segment, 8.5% from social events and a further 6.5% from overnight weekend visitors or extended stays following congresses or conferences.

Original story: Cinco Días

Translation: Carmel Drake

Colau Convinces KKH To Abandon Luxury Hotel Project In BCN

2 October 2015 – Expansión

The real estate fund KKH, which owns the Deutsche Bank building in Barcelona, has agreed not to expand the property and convert it into a luxury hotel, as it had planned, after running into strong opposition from the new mayoress of Barcelona, Ada Colau.

The project has been affected not only by the moratorium imposed by Barcelona en Comú, but also by the fact that its suspension was one of Colau’s election promises.

KKH required permission from the Town Hall to demolish the building and construct a larger one, measuring 5,000 m2 more. In exchange, it has agreed to purchase the ‘Taller Masriera’ for €10 million and cede it to the Town Hall for public use, as well as to acquire the construction rights from Los Lluïsos de Gracia, who were willing to transfer the building rights in exchange for financial compensation.

The fund led by Josep Maria Farré has thrown in the towel and announced that it will renovate the existing building to convert it into luxury housing. In this way, the city bids farewell to a project that would have involved the entry of the hotel chain Four Seasons into Barcelona and the creation of 380 direct jobs.

Yesterday, the deputy mayoress for town planning, ecology and mobility, Janet Sanz, said she was pleased that the developers “had understood the extent of the fatigue that is affecting the city and its residents, regarding the cost and impact that certain operations may have in specific areas”.

Original story: Expansión (by M.A.)

Translation: Carmel Drake

BlueBay Signs JV With Nadhmi Auchi To Operate Hotel Miguel Angel

18 September 2015 – Cinco Días

The Madrilenian Hotel Miguel Angel is going to be operated by a prestigious player once more, but not one that has a significant international presence. The hotel chain BlueBay will manage the property from now on, after it reached an agreement with the owner, the Iraqui born Briton Nadhmi Auchi, who has been running the hotel since December 2013, when Occidental Hoteles departed, whereby putting an end to its operations in Spain.

All of the international hotel chains have had their eyes on Hotel Miguel Angel, amongst others, since the Four Seasons announced its arrival in Madrid, in the Canalejas complex, and Mandarin announced its acquisition of the Ritz. In the end, the Spanish firm BlueBay, owned by investor Jamal Satli Iglesias, will take over the management of the property, which has 267 rooms, under an agreement that will involve the creation of a joint venture between BlueBay and Nadhmi Auchi. Together, they will invest around €35 million on the refurbishment. The renovation will be completed over the next few months and will involve the creation of new facilities and the expansion of the gastronomic offer, according to the chain, which aims to convert the hotel into “one of the most emblematic luxury, 5-star establishments in the city and in Spain”, said the CEO of BlueBay, Joaquín Janer.

This operation is BlueBay’s first foray into Madrid – traditionally, the company has a strong presences in the holiday hotel market, but not in the city hotel segment – it owns one 3-star hotel in Barcelona and two hotels in Mérida (one 5-star and one 4-star). BlueBay’s portfolio contains 52 properties across 27 locations. It will soon add eight more assets as a result of its international expansion, which will take place in the Middle East, Latin America and Europe. In April, it announced its expansion into Morocco and it plans to start constructing four hotels in Brazil this quarter.

In Spain, BlueBay is also working to open two other properties, in Marbella and Estepona, in 2018, which will require an investment of around €100 million. The chain, founded in 1976, operates six brands, including the urban specialist BlueCity. The brand used to be owned by Marsans, but following that company’s bankruptcy in December 2009, the businessman Jamal Satli Iglesias acquired it from Posibilitum, in an operation that included the management of 11 hotels. Satli Iglesias also holds a stake in Málaga Football Club, through which he has a dispute pending with its chairman, Abdullah Al Thani.

Renovation of Madrid’s luxury hotels

The refurbishment of Miguel Angel will represent a new boost for the 5-star segment in the capital, following the arrival of Four Seasons, which resulted in a “pull effect” in Madrid for other major international operators. During this time, Mandarin joined forces with the Olayan Group to purchase the Ritz. Despite this, the city’s hotel market is still missing companies such as Hyatt, Kempiski, Hilton, W and Shangri-La, although the details of the Wanda group’s plans for its hotel project at Edificio España have not yet been revealed. One of the most tempting properties for investors and operators over the coming months will inevitably be the Villa Magna, whose owner rejected a purchase offer from Jaime Gilinski in August for €190 million, and the (Westin) Palace. The owners of the latter have set a sales price of €330 million for the establishment.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake