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

KKH Gets Green Light to Convert Deutsche Bank Building into Super-Luxury Apartments

11 December 2017 – Expansión

The former Deutsche Bank building in Barcelona, which saw its plans to be turned into a five-star hotel fall by the wayside, has finally obtained the municipal licence it needs to execute its plan B. As such, the former office building is now going to be transformed into a super-luxury residential property.

Its owner, KKH Property Investors, is going to invest around €180 million in total, according to market sources, to carry out the complete renovation of the property and build 34 homes with high-end services. One of the features of the project approved recently is that part of the four-storey commercial building located opposite the tower will be sacrificed and a passage will be built to make the residential building independent, and it will be made lighter.

KKH, led by the former CEO of Renta Corporación, Josep Maria Farré, has set out to build the most exclusive residential property in Barcelona. That distinction is currently held by the former Barcelona headquarters of Winterthur, owned by Squircle Capital, whose homes, measuring 500 m2, are sold (unfinished) for around €6 million, equivalent to more than €12,000/m2.

The 34 homes in the Deutsche Bank building will have a surface area of 200 m2 each and, as well as their privileged location, on the corner of Paseo de Gràcia and Avenida Diagonal, are going to enjoy panoramic views over the city. The common areas will include private parking, a gym, a spa, communal terraces, a swimming pool and meeting rooms. One of the features that will distinguish this residential community from others in the city, and which will make it equivalent to the best buildings in London and New York, will be the team of 20 employees that will be on hand to perform maintenance, cleaning, concierge, security and general support services for residents.

Plans

The project’s design has been entrusted to the architect Carlos Ferrater, and the first phase of construction has been subcontracted to Copcisa. The retail building, where Casa Seat will open, is expected to be finished in 2019 and the residential area, which will house another retail store on the ground floor, measuring around 500m2, should be ready by the beginning of 2020.

KKH Property Investors, a vehicle in which KKH Capital Group and the NYC fund Perella Weinberg Real Estate Fund II LP hold stakes, paid €90 million for the property in 2014. It then spent another €20 million to ensure that the Town Hall of Barcelona, led at the time by the convergent Xavier Trias, gave it permission to demolish the property and construct a hotel in its place.

The €20 million was spent buying equipment to lend to the city, to acquire buildability rights, and to pay €10.5 million to the Town Hall. But, when the project had received the municipal green light, Ada Colau arrived in government and, with her, the moratorium and new urban development plan that prevented the construction of the hotel, in which chains such as Four Seasons had expressed an interest and which would have resulted in the creation of 400 jobs.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake