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

Hyatt Returns To Madrid To Manage Hotel On Gran Vía, 31

10 March 2017 – Cinco Días

Hyatt is returning to Madrid. The hotel chain is coming back to the capital nine years after abandoning its role as the manager of Hotel Villa Magna. This week, the company has announced that it will manage the future hotel whose doors are going to open at number 31 Gran Vía, a property that is owned by the company Exacorp One, itself owned by the Mexican Díaz Estrada family.

The hotel chain will open an establishment there during the fourth quarter of this year, under the Hyatt Centric brand, according to a statement made this week by the firm. As such, it will become the first establishment to bear the hotel chain’s urban brand in Spain.

The future hotel will have 159 rooms, a restaurant called “Hielo y Carbón” (Coal and Ice) and a roof-top terrace, which will open during 2018. Jorge Díaz Estrada, Director of Exacorp, recognises that “the hotel’s central location, combined with its unique design, will attract business and pleasure travellers alike”.

In addition to this property, Díaz Estrada has entered Madrid’s real estate market with a bang in recent years with the purchase of several buildings. The most iconic property in its portfolio is Apple’s current flagship store in Puerta del Sol. In addition, the firm has acquired properties at numbers 25 and 27 Calle Montera.

Meanwhile, Hyatt’s return represents yet another boost for the hotel sector in the city. A real commitment from the international brands, which will be further strengthened by the arrival of Four Seasons in the Canalejas Complex and the W, which Starwood is going to open across the road. These establishments will encourage more international travellers and will, according to sources in sector, favour an increase in average prices for hoteliers.

In addition, a number of Spanish hotel chains have also strengthened their presence in the area in recent times. In this vein, Barceló has opened a hotel in Torre de Madrid, close to where Riu is expected to manage the future hotel in Edificio España. Meanwhile, NH, will open the doors to its new hotel on Gran Vía at the beginning of next year.

Original story: Cinco Días (by Laura Salces Acebes)

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

BlueBay Signs JV With Nadhmi Auchi To Operate Hotel Miguel Angel

18 September 2015 – Cinco Días

The Madrilenian Hotel Miguel Angel is going to be operated by a prestigious player once more, but not one that has a significant international presence. The hotel chain BlueBay will manage the property from now on, after it reached an agreement with the owner, the Iraqui born Briton Nadhmi Auchi, who has been running the hotel since December 2013, when Occidental Hoteles departed, whereby putting an end to its operations in Spain.

All of the international hotel chains have had their eyes on Hotel Miguel Angel, amongst others, since the Four Seasons announced its arrival in Madrid, in the Canalejas complex, and Mandarin announced its acquisition of the Ritz. In the end, the Spanish firm BlueBay, owned by investor Jamal Satli Iglesias, will take over the management of the property, which has 267 rooms, under an agreement that will involve the creation of a joint venture between BlueBay and Nadhmi Auchi. Together, they will invest around €35 million on the refurbishment. The renovation will be completed over the next few months and will involve the creation of new facilities and the expansion of the gastronomic offer, according to the chain, which aims to convert the hotel into “one of the most emblematic luxury, 5-star establishments in the city and in Spain”, said the CEO of BlueBay, Joaquín Janer.

This operation is BlueBay’s first foray into Madrid – traditionally, the company has a strong presences in the holiday hotel market, but not in the city hotel segment – it owns one 3-star hotel in Barcelona and two hotels in Mérida (one 5-star and one 4-star). BlueBay’s portfolio contains 52 properties across 27 locations. It will soon add eight more assets as a result of its international expansion, which will take place in the Middle East, Latin America and Europe. In April, it announced its expansion into Morocco and it plans to start constructing four hotels in Brazil this quarter.

In Spain, BlueBay is also working to open two other properties, in Marbella and Estepona, in 2018, which will require an investment of around €100 million. The chain, founded in 1976, operates six brands, including the urban specialist BlueCity. The brand used to be owned by Marsans, but following that company’s bankruptcy in December 2009, the businessman Jamal Satli Iglesias acquired it from Posibilitum, in an operation that included the management of 11 hotels. Satli Iglesias also holds a stake in Málaga Football Club, through which he has a dispute pending with its chairman, Abdullah Al Thani.

Renovation of Madrid’s luxury hotels

The refurbishment of Miguel Angel will represent a new boost for the 5-star segment in the capital, following the arrival of Four Seasons, which resulted in a “pull effect” in Madrid for other major international operators. During this time, Mandarin joined forces with the Olayan Group to purchase the Ritz. Despite this, the city’s hotel market is still missing companies such as Hyatt, Kempiski, Hilton, W and Shangri-La, although the details of the Wanda group’s plans for its hotel project at Edificio España have not yet been revealed. One of the most tempting properties for investors and operators over the coming months will inevitably be the Villa Magna, whose owner rejected a purchase offer from Jaime Gilinski in August for €190 million, and the (Westin) Palace. The owners of the latter have set a sales price of €330 million for the establishment.

Original story: Cinco Días (by Laura Salces Acebes)

Translation: Carmel Drake

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.

(…)

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