Platinum Puts Hotel Asturias in Madrid Up for Sale

1 March 2019 – Eje Prime

The Hong Kong-based investment group Platinum is looking for a buyer for the Hotel Asturias in Madrid, which it purchased in 2014 and which is going to be home to the W chain’s first hotel in the Spanish capital.

Platinum acquired the hotel from the Salazar family five years ago for €35 million. That operation included the two buildings now for sale located at numbers 9 and 11 Carrera de San Jerónimo, close to Plaza del Sol.

In addition, Platinum is looking to divest another property from its portfolio: the building that it owns on Calle de Jacometrezo. That property contains 139 rooms, is going to be operated by Marriott’s Aloft chain and is due to open in April.

Platinum is managed by the Indian textile merchant Harry Mohinani and his wife Roshni Mohinani; it entered the Spanish market in conjunction with Juan Luis Segalerva.

Original story: Eje Prime (by I. P. Gestal)

Summary translation by: Carmel Drake

The Gran Hotel Velázquez, on Sale for More Than 60 Million Euros

2 March 2016

The Salazar family continues its process of selling off hotels, one that began in 2014 with their eviction from the Hotel Ada.

Madrid’s hotel market is at a fever pitch. This Tuesday, the sale of the Villa Magna hotel, on the Paseo de la Castellana, to the Turkish Dogus Group was announced. Just 300 meters from the Madrid’s central avenue, another well-known property has come on the market. The Gran Hotel Velázquez is up “For Sale,” asking for more than 60 million euros.

Owned by the Corporación Hispano Hotelera (which is in turn owned by the Salazar family), the investors who have made offers for the property have been rebuffed by the family, which is nevertheless beset by debts. “They are asking for approximately 62 million euros”, sources in the real estate sector explained to 02B. Meanwhile, those same sources believe that a fair price for the asset would not exceed €35 to 40 million.

An old-fashioned property

Although the location and the building are very attractive, it would be necessary to adapt the building, bringing it up to modern standards. Some call it “old-fashioned.” Others added that the property could be called, “vintage, if not just old.” The 435,000 euros per room requested by the Salazar brothers would require significant additional investments to remodel the establishment.

At first, the owners of the Gran Hotel Velázquez confirmed that the property has been on sale “for a while.” However, other sources at the firm then stated that they had no information on the possible sale and that any statements to the contrary were “rumours.”

The hole of the Salazars

The Salazar brothers have been divesting themselves of their hotels since 2014. In May of that year, they left the Ada Hotel – currently owned by Único Hotels – evicted for failure to pay rent to Real Gran Peña. A year later, in March, the Hotel Maria Elena went to Hotusa while Asturias went to Platinum Estates in May.

The former owners of SOS Cuétara, the current Deoleo, are awaiting a court appearance regarding fraud allegedly committed in 2008. A €213-million loan ended up on the balance sheet of another the group’s company. For that, a judge confiscated their passports and imposed a fine of 93 million euros. Also, the magistrate seized its assets to guarantee a €360-million security.

A hotel bubble

The Gran Hotel Velázquez is just one example, but prices have skyrocketed in Madrid. “A bubble is forming,” warns Bruno Hallé, a consultant at Magma HC. “Threats of a possible moratorium generate uncertainty and consequently the value of real estate increases.” Also, growth is not commensurate with the pace of occupancy and prices in the capital.

Meanwhile, an investor says: “They’ve put this price on to see if someone bites.”

Original Story: Cerodosbe – Carles Huguet

Translation: Richard Turner

 

Madrid Gets Ready for the Opening of 2,000 Luxury Hotel Rooms

7 January 2018 – Expansión

The hotel market in Madrid is enjoying a happy time. After years as the ugly ducking of Europe’s capitals, with barely any major luxury brands operating in the city, 2,000 luxury rooms are scheduled to open in the city centre over the next two years. “Spain had a very moderate number of five-star hotels in comparison with other global capital cities. Nevertheless, the Town Hall of Madrid implemented a strategic plan for tourism, which boosted the image of the city as a global destination and that attracted international companies, which are taking the city to their own tourist clients”, says Javier García-Mateo, Partner in Financial Advisory at Deloitte.

“The existing luxury hotel stock comprises around 5,000 rooms and over the next few years, another 2,000 rooms will be added, of which 1,000 will be new and the rest will be in renovated properties”, adds Félix Villaverde, Manager at Deloitte Financial Advisory.

The first hotel already opened over Christmas: the US hotel chain Hyatt Hotels has returned to Madrid, specifically, to the heart of the city with the opening of Centric Gran Vía Madrid, a five-star establishment with 159 rooms – including 16 suites (…). With an investment of €30 million, Hyatt has returned to Madrid, after leaving the management of another five-star hotel in the capital in 2009: the Villamagna.

During the first quarter of 2018, another five-star establishment is expected to open. In this case, it will be the chain VP in Plaza de España. It will contain 214 rooms, spread over 17 storeys, following an investment of €90 million (…).

Projects on the lookout for a brand

Some of the other new projects planned for this year in the luxury hotel market in Madrid have not yet been defined. They involve plans for the former Hotel Velázquez and the property owned by the fund KKH in Plaza de las Descalzas.

Last May, the Salazar family sold the Gran Hotel Velázquez for around €60 million. Now, the new owner, the real estate group Didra, is looking for a hotel partner to operate the renovated property. In the case of KKH’s property in Madrid, the negotiations are more advanced. The former headquarters of the Monte de Piedad de Madrid is being renovated to open a five-star hotel and a dozen brands have expressed their interest in operating it. The Park Hyatt, The Peninsula and Saint Regis, from the Starwood group, are the favourites in the running, according to sources in the sector (…).

In addition to these projects that still need to be defined, in 2019, several luxury establishments are due to open, including, the first Four Seasons Hotel in Spain, which will open in the Canalejas complex with more than 200 rooms.

Moreover, a four-star, but nevertheless high-profile, hotel is being created by the Mallorcan chain RIU, which will restore Edificio España, in disuse for a decade, to open a modern urban hotel with 650 rooms.

Meanwhile, Marriott Starwood, the largest hotel chain in the world, has teamed up with the Indian investor Harry Mohiani to open a five-star hotel in the former Hotel Asturias, in the same square as the Four Seasons (Canalejas). That property will have 160 rooms (…).

Prices

The opening of these new luxury hotels will have an impact on room rates, which already saw a significant increase in this niche last year.

“Revenue per room (RevPar) in the five-star segment in Madrid has grown by 6.4% p.a. in recent years, almost four times more than the average in other European centres, due not only to the increase in rates but also the better performance in terms of occupancy rates”, say sources at Deloitte.

“The arrival of new luxury operators in Madrid will drive up the price of five-star hotels in the city. In fact, after carrying out comprehensive renovations, we have already seen examples of hotels that have increased their rates by 50%. The most exclusive hotels will charge €750 per night during certain periods of the year”, they add.

Original story: Expansión (by Rocío Ruiz)

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

The Salazar Family Sells Hotel Velázquez For €63M

26 July 2016 – El Confidencial

Beset by debt, the Salazar family, the former owner of SOS-Cuétara, has spent the last three years trying to get rid of its vast hotel and real estate empire, an emporium whose last great jewel was the Gran Hotel Velázquez in Madrid, a property for which it has just received an irresistible offer.

Corporacion Hispano Hotelera, the company owned by the Salazar-Bello family, has reached an agreement with the Didra Group, famous for having constructed the luxurious residential areas of Montepríncipe and El Encinar, to sell the property for €63 million, according to several sources close to the deal.

The Ardid Villoslada family, which is behind Didra, has been linked to the property development business for decades and was made famous due to the marriage of one of its members, Rafael, to Mariola Martínez Borduí, the granddaughter of the dictator Francisco Franco. One of their sons, Jaime Ardid Martínez Bordiú has closed this agreement, with a view to opening a luxury 5-star hotel.

On 23 August 2016, Corporación Hispano Hotelera will present this sale for approval by the General Shareholders’ Meeting, with the aim of wrapping up the final sale in January, once the Salazar family has also received the blessing from its creditor banks, led by Banco Popular.

With its privileged location, in the heart of the neighbourhood of Salamanca, just a stone’s throw from the Retiro Park and the capital’s golden mile, the Gran Hotel Velázquez is a sought-after establishment. Nevertheless, it needs to be completely refurbished, according to experts in the sector.

In fact, Didra is expected to invest between €15 million and €20 million refurbishing the property. It plans to retain the image of a more bourgeois Madrid that characterises it, and always under the maxim of reserving the right to manage it, meaning that the Ardid family’s plans do not include opening a large hotel chain.

Didra maintains a close relationship with brands such as AC and NH, with which it operates some of the properties in its hotel group Nevertheless, the plans that the Ardid family have in mind for the Gran Hotel Velázquez more closely resemble the concept of the Hotel Palacio de Villapanés in Sevilla, a 5-star property located in the neighbourhood of Santa Cruz, in a former seventeenth century palace, which Didra manages itself.

With this sale, Corporación Hispano Hotelera will be reduced to an empty shell, after selling off the majority of its hotels in just over two years. The house of cards first started to topple in the Spring of 2014, when it had to close down Hotel Ada Palace, located on Gran Vía in Madrid, after it was evicted by the owner of the property, Real Gran Peña, which denounced the company for not paying the rent.

A year later, Hotusa purchased the Hotel María Elena, located 50m from Puerta del Sol, and renamed it the Eurostars Casa de la Lírica; meanwhile, Platinum Estates acquired the Hotel Asturias, in Plaza de Canalejas for €21.5 million. (…).

Original story: El Confidencial (by Ruth Ugalde)

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

Large Chinese Investors Pounce On Spanish Hotel Sector

27 April 2015 – Expansión

The Asian giant is taking centre stage / Since HNA acquired shares in NH, interest from Chinese investors looking to buy hotels in Spain and forge alliances with chains such as Melia and Barceló has skyrocketed.

The Spanish tourism sector has sparked significant interest amongst Chinese investors. Since HNA knocked on NH’s door for the first time in 2011, interest in investing in Spain has been unleashed. In recent years, hotel purchases by Chinese investors and alliances between Asian groups and major Spanish (hotel) chains, such as NH, Melia and Barceló, have exploded, as all parties look to explore opportunities in Europe and Asia.

In the past two years, China has invested more than €870 million in Spanish hotels and chains. Of that amount, €420 million relates to the funds disbursed by HNA to become the major shareholder of NH. The industrial conglomerate paid €234 million for a 20% stake in 2013 and last year, it purchased the shares owned by Amancio Ortega, owner of the textile empire Inditex, and Intesa Sanpaolo.

Furthermore, in 2014, Chinese investors signed five transactions to purchase hotel assets, including the deal between Barceló and Kangde for the Hotel Santiago in Tenerife (pictured above), which was agreed at the end of last year and signed in 2015.

Platinum

Out of all of these deals, the one that attracted the most media interest was Dalian Wanda’s purchase of Edificio España (Madrid) for €265 million. The intention of Wang Jianlin, who owns Wanda, is to create a residential, retail and luxury hotel complex. However, for the time being, Jianlin is focusing on the five-star hotel that he is preparing (to open) in London, where he will launch his Wanda brand in Europe.

Platinum Estates, the group led by the textile businessman Harry Mohinani and headquartered in Hong Kong, has closed two deals on a smaller scale. In February 2014, Platinum acquired the Estel building, in Barcelona (Telefónica’s former headquarters) for €56 million. In the autumn, it purchased Hotel Asturias (Madrid), near Gran Vía, from the Salazar family for €35 million.

The company plans to convert both properties into luxury apartments. According to experts in the sector, that is one of the keys to explaining the Asian interest in Spain, where foreign citizens are required to invest €500,000 in a residential asset to obtain a (resident’s) visa (known as the golden visa). Other factors include the measures promoted by the Chinese government to encourage investment overseas and the revaluation of the Yuan against the euro. Sources in the sector confirm that interest from Asian investors has increased, but they say that they do not seem to follow any particular investment pattern, and that, to date, they have focused on individual assets. Despite all of this, the large consultancy firms in the sector are optimistic about the potential of the Asian market – they have already recruited Chinese employees and are now preparing tours around the country to bring the two markets closer.

That is another one of the advantages that the alliances with Chinese groups offer the Spanish hotel chains. For example, NH will enter the (Chinese) market hand in hand with HNA. Both have created a joint company, with a Chinese majority, which will begin operating in 2015, when NH takes over the management of 6 of HNA’s hotels. In the case of Melia, the chain operates two hotels owned by its partner Greenland in China, and in 2014, it teamed up with the travel group Ctrip.

Original story: Expansión (by Yovanna Blanco)

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