Reig Capital Group has sold the emblematic Mandarin Oriental hotel in Barcelona to the Saudi fund The Olayan Group. Although the amount of the transaction has not yet been disclosed, the newspaper La Vanguardia puts the figure at more than 220 million euros. In 2009, Reig Capital bought the asset for around 150 million euros.
This luxury hotel is located on the prestigious Passeig de Gràcia, an exclusive shopping avenue in the heart of Barcelona. The five-star establishment has 120 rooms, a spa, a rooftop pool with spectacular views of the city of Barcelona and an indoor pool. All rooms and suites have been designed by the renowned interior designer Patricia Urquiola.
Since its opening in 2010, the hotel has been exceptionally successful, cementing its status as a top destination in the city. In 2014, the establishment opened 22 new suites after Reig Capital leased for 25 years the adjoining building, the former headquarters of Banco Sabadell, owned by Punta Na, the owner of the fashion distribution brand Mango. Between them, the two companies invested 20 million euros in the expansion. The deal with Olayan includes the sale of the property located at number 38 Paseo de Gracia, where the entrance of the hotel is located, until now owned by Reig Capital. The right to rent the hotel suites located in the adjoining building at number 36 Paseo de Gracia, above the Mango shop, remains owned by Punta Na.
The luxury hotel sector in Spain has experienced a 67% growth in the last decade, according to data from JLL Hotels & Hospitality. According to its calculations, Madrid and Barcelona will close 2023 with 7,000 luxury hotel beds.
The transaction has been advised by JLL's sales team. In this regard, Patrick Saade, Senior Managing Director of Hotels & Hospitality Capital Markets at JLL in EMEA, pointed out that "the hotel is one of the most luxurious assets in the city, with an unbeatable location and an exceptional brand".
According to Saade, "Investors have shown a strong appetite for the asset despite the difficult capital market environment. Investors are aware that luxury hotels have become an increasingly institutional investment and that changing consumer preferences are giving rise to new investment opportunities. The hospitality segment is on the radar of investors looking to deploy capital in an evolving real estate asset class.
