Global commercial real estate firm CBRE announced this week that their client, Renta CorporaciÃ³n, has sold 80 Gran VÃa, Madrid - a substantial hotel property located on the corner of the popular Plaza EspaÃ±a for â¬20.5 million (approximately $25 million USD).
The buyer, owner of the Hotel Chiqui in Santander, plans a considerable refurbishment of the 7,300 square metre property that will create a 160-bed hotel situated in one of the most central areas of the city.
CBRE's Head of Hotels Spain Jorge Ruiz commented, "This deal confirms that the hotel investment community is mainly focused in acquiring well located assets at competitive prices. The Gran Via in Madrid is a superb location for a hotel as it benefits from being closed to Madrid main tourist attractions."
Tourism demand in Spain hit a record high in 2011, with 286.6 million overnight stays and 85.4 million travellers staying in hotels. There was a 7.3% increase in overnight stays compared to 2010. Madrid in particular experienced record highs. There were 16.3 million overnight stays in the capital city during 2011, an increase of +7.7% year-on-years.
Miguel Casas, CBRE Hotels' Director in Madrid explains "while the demand in 2012 seems to stabilise, it is fair to say that hotel prices in the city remain low compared to other European capital cities and it is the main challenge the hotel sector in facing today in Spain".
This potential to increase hotel revenues keeps foreign investors and operator's eyes in Spain's prime hotels as real estate prices are been pressed down due to an increasing availability of product. However, the number of international hotel flags in the country remains comparatively low, and has only been relevantly increased in the last year through corporate transactions like Marriott's acquisition of 50% of AC Hotels and Wyndham's purchase of MeliÃ¡'s Tryp brand.