Tag: KKH Capital

KKH Sells the Future Hotel Edition in Madrid for €220M

12 December 2018 – Expansión

The Malaysian group YTL Corporation is going to formalise the acquisition of the building when it opens, in 2020. The fund is also selling the Hotel Edition in Barcelona to a group from the Middle East.

Hotels in Madrid and Barcelona are continuing to attract stratospheric investments, encouraged by the appetite of investors for Spanish property and the strong performance of tourism in the two cities. The latest to close a million-euro operation is the fund KKH Property Investors, headquartered in Barcelona, which has agreed to sell the five-star hotel that it is building in the former headquarters of Monte de Piedad, in the centre of Madrid. The buyer is the Malaysian group YTL Corporation, which is going to pay €220 million for the property when the hotel is inaugurated, at the end of 2020.

On the other hand, KKH has also sold another five-star hotel in Barcelona, for around €80 million to a group from the Middle East whose name has not been revealed. The two have operating agreements with the US chain Marriott, through its brand Edition.

KKH Property Investors is an alliance between KKH Capital, founded by the former CEO of Renta Corporación, Josep Maria Farré, and the funds Perella Weinberg Real Estate Fund I, Perella Weinberg Real Estate Fund II and PW Real Estate Fund III, advised by Aermont Capital LLP. The joint venture, created in 2014, has an investment budget of €500 million.

The fund’s strategy is based on the search for prime locations in Spain, the construction of five-star hotels, the agreement with major international chains and the sale of the asset once it has been inaugurated. Since its creation four years ago, the fund has planned numerous investment and divestment operations.

Luxury hotels

The two hotels that have been sold by KKH share the fact that they have been designed by the architect Carlos Ferrater, they are both five-star establishments and they will both be integrated into the Edition chain.

In the case of the hotel in Madrid, whose operation will be effective from the end of 2020 (…), it will have a surface area of 25,000 m2 spread over seven above-ground storeys and two basement floors (…).

The future Hotel Edition in Madrid, located just 200 metres from the Plaza del Sol, will have 200 rooms and suites, and like the other establishments in the brand, will place a great emphasis on design and on the restaurant offering. It is expected to have six restaurants and will result in the creation of 400 jobs (…).

In Barcelona

In the Catalan capital, KKH Property has followed a similar pattern. In that case, the divestment, agreed a while ago, has already been formalised, given that the hotel was inaugurated in September (…).

The hotel in Barcelona has 100 rooms and employs 230 people directly. Investment in the hotel exceeded €50 million.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Barcelona’s Vía Portaferrissa Looks To Reposition Itself As Prime Real Estate

27 November 2017 – Eje Prime

Portaferrissa is claiming its place amongst the prime shopping streets of Barcelona once again. The road has a privileged location, between Portal de l’Àngel and Las Ramblas, receives local and tourist traffic and has several available retail spaces, but its prices are not competitive and only a handful of operations have been closed in recent times. Now, two historical properties are making a move to put Portaferrissa back on the prime map.

One of them is at number 25, so-called Casa Gralla, which until just a few months ago was occupied by Pepe Jeans. The property is owned by the Casacuberta family, which also controls the building that houses the Decathlon store on Calle Canuda, as part of a portfolio containing more than twenty assets.

During the 1990s, the ground floor premises of number 25 housed shopping arcades, Gralla Hall, but that closed at the beginning of the 2000s, when the model showed its first signs of weakness.

Pepe Jeans then took over the lease of the premises and sub-leased part of the space to Quiksilver, which remained for years. Nevertheless, that company did not invest in creating a retail store, other than eliminating the separation of the former arcade.

The Casacuberta family has now begun to renovate the property to merge the two spaces, which will span 1,900 m2 after the renovation. The most recent significant negotiations (held with a view to finding a tenant) were with Adidas, with which a pre-agreement was reached, although the operation did not end up going ahead.

Now, the property is facing its third year on the market, although its prices, which are well above market rates, may still be a barrier.

Another one of the premises on the market on Portaferrissa is Palau Castanyer, which currently houses the Art Montfalcó souvenir shop. That property was sold to KKH Capital group in November for €24 million.

Falling prices 

Portaferrissa begins at La Rambla dels Estudis and ends at La Plaça de la Cucurulla, just stone’s throw from the very busy Portal de l’Àngel. Prices on the street reached their peaks before the crisis, with an average of €1,808/m2 per year in 2005, although the prices of stores measuring less than 100 m2 ended up exceeding €2,500/m2.

However, since then, prices have plummeted, by around 30%, according to sources in the sector. “In 2007, River Island rented the store at number 13 for €970,000, and a few years later, it was leased for €600,000”, say the same sources.

According to the recent report Main Streets Across the World, compiled by the consultancy firm Cushman & Wakefield, the average rental price per square metre per year on Portaferrissa amounted to €1,980 in 2016, in line with the previous year.

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

Translation: Carmel Drake

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

JLL: Hotel Inv’t Reaches Almost €5,000M In 2 Years

11 January 2017 – El Independiente

The tourist boom (which saw record numbers of tourist arrivals and a recovery in demand from Spanish clients) was followed by a boom in the hotel sector (with record occupancy rates and tariffs); and both have been supported by a boom in investment in hotel properties. With tourist activity at record highs and no signs of a slow down in sight, the purchase of hotel buildings has become a cushy deal for investors.

In two years, real estate investment in hotels in Spain has amounted to almost €5,000 million. Following a historical record in 2015, when operations were closed amounting to €2,650 million, last year, transactions were signed amounting to €2,155 million, the second best year ever, according to the latest report compiled by the consultancy firm JLL Hotels & Hospitality Group.

Several major operations have sustained the pace of investment. Just before the end of 2016, Merlin Properties sold off its hotel portfolio, transferring it to the fund Froncière des Règions for €535 million. The sale of the hotel Villa Magna de Madrid by Sodim SGPS to Dogus Group for €180 million represented a new national record in the price paid per room (€1.2 million per room, compared to €800,000 per room in the case of the Ritz in 2015, which had held the record since then).

Other large transactions included the sale by AXA Investment Managers of the Pullman Barcelona Skipper Hotel to Shaftesbury for €93 million; and the purchase of the historical headquarters of Caja Madrid by KKH Capital Group and Perella Weinberg RE for €80 million, which it will convert into a luxury hotel.

In total, investors purchased 130 hotel assets in Spain last year, in addition to the 143 hotels that they bought during the record year of 2015. Madrid led the ranking as the main location for investment, accounting for 28% of the total volume with €597 million. It was followed by Barcelona with €344 million (16%), despite the hotel moratorium declared by Ada Colau’s Town Hall, and Las Palmas (7.4%), Fuerteventura (7.4%), Málaga (7.4%), Valencia (7%) and Mallorca (6.1%).

Investments funds take over from the Socimis

During 2015, the major stars of the hotel investment segment by far were the Socimis (…), which accounted for almost €1,000 million of transactions during that year. But they have been replaced by investment funds, which have become the major players in the hotel investment market, accounting for 51.5% of total volumes.

The investment funds that have accounted for most of the transaction volume have been: Foncière des Régions, with 19 hotels and a total investment volume of €535 million; HI Partners, which has purchased eight assets for €200 million; KKH Capital Partners, which together with Perella Weinberg RE, bought the Celenque building for €80 million; and Internos Global Investors, which purchased Hotel Innside Madrid Suecia for €45 million.

According to JLL’s forecasts for 2017, the hotel investment market will continue to be active and investment volumes will remain similar to those seen in 2016, thanks to interest from international investors. The consultancy firm thinks that the requirement for owners to continuing to reduce the debt on their balance sheets, the strengthening of the strategy by national hotel chains to sell off properties and continue to operationally manage establishments, and the strong outlook for the tourist sector in general place the Spanish hotel market in the investor spotlight.

Original story: El Independiente (by David Page)

Translation: Carmel Drake

KKH Property Buys Monte de Piedad’s Former HQ For €80M

9 December 2016 – El Confidencial

A year after engaging Irea to organise an official sales process for its headquarters in Plaza del Celenque, the Fundación Montemadrid (the successor of the former Fundación Caja Madrid) has reached an agreement with KKH Property Investors to sell the property for around €80 million, according to sources consulted by El Confidencial.

This is a key operation both for the Fundación, which will raise funds through this divestment to allow it to ensure the continuation of its social work, as well as for the buyer, which is entering the sought-after real estate market in Madrid with a bang.

Headquartered in Barcelona, KKH Property is a joint venture between KKH Capital, the investment group controlled by the former CEO of Renta Corporación, Josep María Farré, and Perella Weinberg, which owns a stake in this partnership through one of its opportunistic funds.

The JV plans to convert the Monte de Piedad building in Madrid into a luxury hotel, with 180 rooms and suites, as well as an extensive range of restaurants and spaces for conferences and social events. The building has a surface area of 27,000 m2, spread over seven above ground floors and two basement floors, used for parking.

Located between Plaza de Celenque and Plaza de Las Descalzas, the property will continue to house the activities of the Fundación Montemadrid, which will continue to occupy approximately 2,000 m2 of the property. (…).

The building was constructed in 1975, on the site of the former Montepío, just opposite the Monastery of Las Descalzas Reales and only 200 m from the Puerta del Sol. (…).

The sale of the former headquarters of Fundación Montemadrid, whose offices are now located next door in La Casa de Las Alhajas, sparked interest amongst a large group of buyers. Nevertheless, the price expectations of the seller ended up whittling down the potential candidates to just two, KKH Property and Hispania, both of which submitted definitive offers in the summer, according to market sources.

In the end, KKH has emerged victorious. Although this is the company’s first major operation in Madrid, the vehicle led by Farré already owns several iconic buildings in Barcelona, most notably the former headquarters of Deutsche Bank, located at numbers 109 and 111 on Paseo de Gracia, which it acquired in July 2014. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake