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

Hispania to Convert the Café La Granja Building in Bilbao into a Hotel

10 October 2018 – El Correo

Thanks to the significant investments carried out in recent years, the investment fund Hispania has become the largest hotel group in Spain. It has outperformed traditional companies in the sector such as Meliá, HI Hoteles and Hoteles Globales in terms of the number of establishments and rooms. At the height of its expansion phase, boosted at the end of last year by the purchase of the Alua chain – which saw it acquire seven resorts in the Canary Islands and the Balearic Islands for €165 million – it has set its sights on Bilbao. Just a week after another high-profile fund, the Madrid-based Millenium Group announced its intention to convert Banco Santander’s headquarters on Gran Vía into a luxury hotel, Plaza Circular is now going to witness the transformation of one of the Bizcayan capital’s most iconic buildings: the site that formerly housed Café La Granja.

The hostelry establishment, which started life on 31 July 1926 and which was acquired by the real estate firm Navarra Fitbox two years ago, has been closed since 8 February 2017 when, unexpectedly, it pulled down its shutters for the very last time. The insurance company Helvetia sold the property for almost €7.5 million. After 90 years of uninterrupted activity, the historical café has only re-opened its doors since then on a sporadic basis to host one-off events of a cultural nature, such as book fairs. The offices and insurance companies that used to occupy the upper five floors have been evicted, starting back in 2010 (…).

Hispania is going to strengthen the hotel supply in Bilbao, which is experiencing a genuine frenzy, with the planned opening of seven new properties over the medium term. The fund has been planning its debut in the town for a while, but its intentions have always focused on this area, which will draw a new Bilbao with the arrival of the fashion giant Primark and the launch of the Regional Government’s international entrepreneurship centre in the former BBVA tower, which was sold for €100 million two weeks ago. The arrival of the AVE and the strong commercial positioning have pushed up prices considerably in this area. Like in the case of the building work to be carried out on the site of Santander’s former headquarters, the transformation of La Granja will have to be approved by the Town Hall’s Heritage Committee, which has not yet assessed the project, given that it is an artistic building. That procedure may be completed this month (…).

Original story: El Correo 

Translation: Carmel Drake

Portugal’s Largest Hotel Group Opens its First Establishment in Madrid

10 October 2018 – Inmodiario

Pestana Hotel Group, Portugal’s largest multinational hotel group, has today unveiled Hotel Pestana Plaza Mayor – one of two projects that the company is developing in Madrid – which will be inaugurated at the beginning of next year as part of its Collection group, the most exclusive brand comprising luxurious and monumental buildings in premium locations.

This opening is the result of a strategic commitment by the group to various European capitals. According to José Roquette, Chief Development Officer at the Pestana Group, “Over the next five years, we are going to be strengthening the position of the Pestana brand as an international chain in the major global markets, always on a par with our leadership in Portugal. The opening of Pestana Plaza Mayor, the group’s first hotel in Madrid, represents a very important step in the realisation of our strategy. We are convinced that, even though it is a very competitive market, we will be able to establish ourselves thanks to our firm commitment to quality”.

The Pestana Group, founded in 1972, operates in 15 countries with almost 100 hotels, which receive more than 3 million tourists. It has extensive experience in hotel management in historical buildings, including through the network of Pousadas de Portugal (the equivalent of the network of Paradores in Spain).

Located in Plaza Mayor, in the heart of the Madrilenian capital, Pestana Plaza Mayor will comprise two historical buildings – the Casa de la Carnicería (subsequently the Third Town Hall and then the Municipal Newspaper Library) and the former Fire Station. The Pestana Hotel Group’s new hotel will involve an investment of €11 million and will contain 87 rooms, decorated in a contemporary style that respects its urban and historical location (…).

In addition to a cafeteria and bar, Pestana Plaza Mayor will have a restaurant in the hotel’s cloisters and an indoor spa with a swimming pool, all in the historical heart of Madrid.

Pestana Plaza Mayor expects to open to the public during the first quarter of 2019 (…).

Original story: Inmodiario

Translation: Carmel Drake

AC Hotels to Invest €5M in its First ‘Autograph’ in Valencia

1 October 2018 – El Mundo

AC Hotels, owned by the Navarran businessman Antonio Catalán, has acquired the rights to operate the former CAM building in Valencia, on the central street, Calle Pascual y Genís. Until now, the tenant was the Valencian firm Join Contract, which was granted use of the property by Solvia Group (Banco Sabadell) for 30 years in July, and which is now placing that use into the hands of this prestigious chain.

According to sources speaking to El Mundo, the firm AC Hotels competed against other major chains in the sector including NH and Barceló, as well as the local chain Grupo Intur, owned by the Gimeno family, which controls a large proportion of the major hotels in Benicàssim. Nevertheless, AC Hotels, which already has a hotel very close to what will become its newest location, decided to push hard for this site to whereby expand its business with the construction of what will be its first luxury hotel in Valencia.

That is why it will be called ‘Autograph’, the high-end brand that this operator uses to distinguish its top hotels. It will be the first of its kind in Valencia, although the firm has other luxury hotels with these characteristics operating under the same brand in Madrid and Barcelona.

Sources familiar with the operation have said that AC Hotels is going to invest almost €5 million in the renovation of the iconic building. If there are no delays, the building work will begin before the end of the year. The execution of the work will be carried out by the Valencian firm Join Contract, the same entity that has transferred the use of the asset to AC Hotels for 30 years (…).

More than 60 rooms

Although the project is still in its preliminary phase, some details have been published about the future AC Hotels Autograph. With a surface area of 4,500 m2 (580 m2 per floor), the hotel will have around 60 rooms, including suites and standard rooms. There will be a restaurant and hall on the ground floor, and there will be a small swimming pool for guests on the roof (…). The building will have nine floors in total, two of which will be used for parking (…).

Antonio Catalán, leader in the sector

AC Hoteles, from Antonio Catalán, is one of the leading chains in the hotel sector in Spain. It was founded in 1997 by this established Navarran businessman, who previously sold the NH chain to an investment fund for €70 million. After founding AC Hoteles, Catalán sold half of his shares to the chain Marriott for €80 million. Today they have more than 140 hotels open or under development around the world (…).

Original story: El Mundo (by Sergio Aspas)

Translation: Carmel Drake

Solvia Leases CAM’s Former HQ in Valencia to an Architecture Firm

5 July 2018 – Eje Prime

Solvia has found a tenant for CAM’s former headquarters. The real estate arm of Banco Sabadell has just completed the rental of this asset, located at number 22 Calle Pascual and Genís in Valencia, to the architecture firm Join Contract. The new tenant of the property is going to remodel it to convert it into a luxury hotel, according to Valencia Plaza.

The duration of the rental contract may extend to thirty years. CAM’s former headquarters has been empty for the last four and a half years, after Solvia, which used to occupy the property, decided to move to the Ciudad Gran Turia at the end of 2013.

The building, constructed in 1916 by the architect Francisco Javier Goerlich Lleó for the Niederleitner family, spans more than 4,500 m2 spread over nine floors: two underground parking floors, one ground floor, a mezzanine level, four regular floors and the attic.

Join Contract, administrated by Óscar Nácher, is still deciding what to do with the premises on the ground floor. The new tenant is debating between opening a restaurant there or leasing it for commercial use, given that the site is very close to busy Calle Colón.

Administrated by Valencian businessmen from the hotel sector and with 25% of its share capital owned by foreigners, Join Contract already signed a similar operation last year to convert the former headquarters of the Regional Ministry of Industry on Calle Colón in Valencia into a luxury hotel.

Original story: Eje Prime

Translation: Carmel Drake

Lugo’s Only 5-Star Hotel Goes up for Auction for c. €5M

16 May 2018 – El Confidencial

It has been closed for four years and weeds are spreading uncontrollably across the estate. The only luxury five-star hotel in Lugo has gone up for auction for just over €5 million – the auction price includes the hotel’s furniture and a chapel in two separate lots – as part of the liquidation plan that is being followed since Mercantile Court number 12 of Madrid ruled against its owner, Alvaher 98. That company purchased the property in 2007 and built on the ruins of what used to be the Palacio del Conde de Lemos. Alberto Vázquez wanted to turn around his business activity, which focused on meat products and recover this historical and artistic gem, which originally belonged to the López de Lemos family and which had been abandoned since the beginning of the 20th century.

The bidding has now concluded with a single bidder offering €2.4 million for the hotel, below the €4.7 million auction price. As such, we will have to wait and see whether the court authorises the sale or not, given that it would not cover the debt. Meanwhile, in the other lots, €60,000 has been offered for the furniture, compared with an auction value of €450,000, and €6,000 has been offered for the chapel, above the auction value of almost €1,800.

The Hotel Palacio de Sober, whose refurbishment cost several million euros – most of which came from public funds – is also the oldest civil architecture building in Galicia, the largest estate in the autonomous region, and its chapel dates back to the 7th century. A year ago, the same court opened a sales process for possible interested parties to bid, and although several companies expressed their interest, no firm offer was submitted. Now, as part of the liquidation process of the owner company, its fate is being put to the test through a public auction (…).

The property has several financial charges, including a mortgage in favour of the Galician Institute for Economic Development (‘Instituto Galego de Promoción Económica’ or Igape), the public entity that backed the project to open the hotel at the time through loans and subsidies, as well as embargoes for non-payments to the Social Security department.

Located in the south of the province of Lugo in a natural setting, 10km from Monforte de Lemos and 38 km from Ourense, it opened its newly renovated doors in 2010 (…). It had 43 super-luxury rooms, all of which measure more than 25 m2 (…).

The price per room used to cost no less than €300 per night for the cheapest rooms, whilst sleeping in one of the suites cost upwards of €750 (…).

At the beginning of 2012, just two years after its inauguration (…), the Palacio de Sober stopped receiving guests and it definitively closed its doors in March 2014 (…). In February 2015, the owner company was declared bankrupt (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Hispania Sells A Hotel To Its Socimi With Barceló For €26.6M

17 November 2017 – Eje Prime

Change of tack in the Socimi universe in Spain. Hispania has sold the Hotel Sandos San Blas, located in Tenerife, to the Socimi Bay Hotels & Leisure for €26.6 million, according to sources at the company. The Socimi is owned by Hispania (80% stake)and the hotel chain Barceló (20%).

This is the first purchase operation that the Socimi has carried out since it started to trade on the Alternative Investment Market (MAB) in July. Bay has acquired all of the shares in the company Eco Resort San Blas, owner of Hotel Sandos San Blas, which has 331 rooms and a five-star rating.

The purchase has been financed using own funds and intra-group loans, and according to Hispania, the acquisition price of Eco Resort has been calculated on the basis of the valuation of Hotel Sandos San Blas (performed by CBRE in June) and the company’s net debt.

Bay’s most recent operations include the purchase of all of the shares in the entity Armadores de Puerto Rico for €6.2 million. That company owns a plot of land in Lanzarote on which the Socimi plans to build a luxury hotel with 225 rooms.

In July, the Socimi also completed the purchase of Fergus Tobago, located in Palmanova, Mallorca, for €20.5 million and Hotel Selomar, located in Benidorm, for €16 million. In terms of future investments, the group held real estate investment commitments amounting to €19.4 million as at 30 June 2017 (…).

The Socimi Bay Hotels & Leisure debuted on the stock market with a portfolio of 22 real estate assets, worth €790.39 million. They include 19 hotels, with 6,900 rooms, worth €756.29 million. Moreover, the Socimi owns two shopping centres, El Castillo I and II, and the Escala marina, all of which are located in the Canary Islands.

According to the latest available results, the Socimi Bay increased its profit by 87% during the first half of the year, to €102 million. Rental income from its hotels and shopping centres rose by 26.5% to €38 million.

Original story: Eje Prime (by C. Pareja)

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

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