Hotel Villa Magna On The Market For €180M

2 June 2015 – Expansión

Madrid/ Sodim, the holding company owned by the Portuguese family Queiroz Pereira, is looking for a buyer for the five star hotel it acquired for €80 million in 2001.

Following the sales of the InterContinental and Ritz hotels to the Qatari sovereign fund and the alliance formed by Mandarin and the Saudi firm Olayan, respectively, it is the turn of Villa Magna. Sodim, the holding company owned by the Portuguese family Queiroz Pereira, has put the hotel, which it purchased from the Japanese company Shirayama in 2001 for €80 million, up for sale.

Sodim is asking €180 million for the five star property, located on Paseo de la Castellana. If it achieves its goal, it will become the largest operation to be signed in Madrid, ahead of the Ritz – €130 million – and the InterContinental – €70 million – but behind the €200 million paid by the Qatari Diar fund for Hotel Vela in Barcelona in 2013.

The operation, which is in its initial phases, may attract interest from foreign investors and international hotel groups wanting to improve their location or enter Madrid’s market, such as Hyatt, Hilton, Shangri-La, Kempinski and Jumeirah, amongst others.

Hyatt managed the Hotel Villa Magna for almost two decades until 2009, when following the complete renovation of the hotel, the owners decided to take over the management themselves. Sodim also owns the Hotel Ritz in Lisbon, which is operated by Four Seasons, which is itself finalising its entry into the Spanish market, at the Canalejas complex in Madrid, together with Juan Miguel Villar Mir.

Hyatt no longer has a presence in Spain after it exited the Villa Magna and La Manga (Murcia). Its name has also appeared on the list of candidates to take over the management of the Hotel Miguel Angel, whose future is still not clear. Its owner, the British investor of Iraqi origin Nadhmi Auchi, is operating the property following Occidental’s exit last year.

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The Hotel Villa Magna underwent a major refurbishment several years ago. It closed its doors on 1 August 2007 and reopened again at the beginning of 2009…€50 million was invested in total…the result was a hotel with fewer, but more luxurious rooms. The property retained its distinctive pink granite façade and the number of rooms decreased from 182 to 150. In exchange, the number of suites increased from 18 to 50. It also expanded its gastronomic and leisure offer, with new restaurants and a spa. Since 2009, it has offered rooms measuring between 30m2 and 290m2 – the Royal Suite.

The average room rate at the Villa Magna starts from €310 per night for a standard room. The Royal Suite costs €16,000 per night.

(….) The luxury hotel sector has been hit by the crisis, although the Villa Magna has not suffered as much as some. In 2013, it generated turnover of €19.29 million, up 4.8%…and the net profit was €3.68 million, compared with losses of €14.89 million in the previous year.

Nevertheless, the hotel closed 2013 with negative equity of €33.8 million, due to financial charges and impairment losses. Its financial debt exceeded €70 million. Even though it has the backing of Sodim through equity loans, the auditor PwC warned of significant uncertainty in terms of the hotel’s capacity to continue as a going concern.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Hotel Villa Magna In Madrid Up For Sale

16 January 2015 – idealista news

The Spanish hotel sector is on the radar of investors. The combined effects of the growth in tourism, falling price of oil and weakness of the euro bodes well for the performance of the sector; and sellers do not want to miss out on the opportunity. In the luxury segment, not only are the Ritz and Miguel Angel Hotels in Madrid up for sale, so too is the Villa Magna. Its owner, the Portuguese businessman Pedro Queiroz Pereira has expressed interest in selling the property, although the bids received so far have fallen below expectations.

Although no official sales mandate has been issued yet, the Portuguese firm Queiroz Pereira is open to offers for the purchase of Villa Magna, located in the Salamanca neighbourhood of Madrid. According to market sources, the selling price is close to €130 million, a price that no investor has been willing to pay so far.

Financial sources say that the price is inflated and that the hotel is not worth more than €90 million. Idealista.news contacted the owner of the property who declined to comment.

The Portuguese holding company, which also owns the Ritz Hotel in Lisbon, purchased the Villa Magna in 2001 from a Japanese family, the Shirayamas. Six years later, in 2007, it decided to undertake a “facelift” of the hotel, which was closed for 14 months whilst renovation work was completed. Sodim, a subsidiary of the Queiroz Pereira Group (and owner of Semapa, the main industrial group in Portugal) invested around €150 million on the hotel acquisition and remodelling work.

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Hotel Villa Magna currently has 150 rooms of between 30m2 and 290m2, as well as various conference rooms, meeting rooms and a garden for outdoor receptions and dinners. It also has a wellness club with a sauna and Turkish bath.

Hotels, an investor target

In 2014, investment in hotels amounted to €1,081 million, up 37% on the previous year, to reach levels similar to those recorded before the crisis. The following transactions were amongst those that took place in the 5 star segment: the Hotel Renaissance in Barcelona was sold by Marriott International to the Qatar Armed Forces for €78 million; the Hotel Intercontinental in Madrid was sold to the Katara Hospitality Fund for around €60 million; and the Hotel Meliá La Quinta in Marbella was also sold.

Last year was also significant because more transactions were recorded in the holiday hotel sector than in the urban sector. Transactions included the acquisition of the Guadalmina Hotel in Marbella (4 star) and the Meliá Jardines hotel in Teide, Tenerife (also 4 star) by Socimi Hispania.

The arrival of the Four Seasons chain, a boost for the sector

The arrival in Spain of the luxury hotel chain Four Seasons has increased the level of interest in the renovation of historic properties, such as the Miguel Angel and Ritz Hotels in Madrid, which are currently up for sale. This foreign chain expects to open its first property in the Plaza de Canalejas, Madrid in 2017. It will be the first Four Seasons hotel in Spain.

Original story: idealista.com (by @pmartinez-almeida and tânia ferreira)

Translation: Carmel Drake