The ideal commercial mix - content.knightfrank.com · top 10 countries with the highest number of luxury hotels are european. 1. United States 1,203 2. Italy 237 3. United Kindom

HOTELS & RETAIL

KNIGHTFRANK.ES | 1

RETAIL RESEARCH

LUXURY HOTELS & RETAIL: The ideal commercial mix

PARIS: A reference point in rental growth

CENTRAL MADRID´S transformation

HOTELS & RETAILRESEARCH

KNIGHTFRANK.ES | 32 | KNIGHTFRANK.ES

Introduction

Drawing on the retail expertise of our Pan-European network, we have specifically focussed on Madrid and Paris to explore the relationship between tourism generated by luxury and 5-star hotels and the evolution of prime retail landscapes. The Madrid retail market is constantly evolving and the current developments in the city centre mean there are exciting times ahead for both retail operators and investors. Knight Frank remains at the forefront of Flagship retail. We hope you find this report thought-provoking and enjoy reading it as much as we enjoyed compiling it.

Elaine BeachillDirector of Retail Capital Markets and Flagships

We are delighted to present this report, in which we share our analysis, insight and opinions on the trends shaping Madrid´s retail landscape.

The increase in quality and quantity of tourism over the next 18 months will directly and positively impact Flagship retail in Madrid.

HOTELS & RETAIL

Pablo Párraga Head of Retail [email protected]+34 600 919 078

Elaine BeachillDirector of Retail Capital Markets and [email protected]+34 600 919 016

Brynn EvansSenior Consultant Retail Capital Markets and [email protected]+34 600 919 129

Tamara SánchezSenior Consultant Retail Capital Markets and [email protected]+34 600 919 073

Jasper HensonConsultant Retail Capital Markets and [email protected]+34 600 919 108

Rosa UriolDirector of Research [email protected]+34 600 919 114

Laura GarcíaConsultant of Research [email protected]+34 600 919 113

Cover: Centro Canalejas Madrid, which will be home to the Four Seasons hotel



Hotels & retailNew luxury hotel openings and refurbishments drive up the retail offering in the surrounding area, drawing in high-end brands eager to tap into the increased number of potential customers that fit their target public





Hotels and retailers have always gone hand-in-hand, and with tourism pro-viding retailers with one of the main sources of customers, many opt to

open stores near to hotels.

Five-star hotels act as a magnet for high-end brands looking for unique locations. While retailers help bring a more stable and higher quality tourism to the area, attracting more affluent tourists who not only buy bigger ticket items and consume more goods and services, but also have longer average stays.

Europe boasts a very strong hotel supply. Four of the world’s top 10 countries with the highest number of luxury hotels are European, a rather re-markable figure considering the other countries in the ranking are much larger (with the exception of Thailand).

European cities are established as go-to luxury tourism destinations, with new and improved ho-tels opening up in the most exclusive areas of cities all across Europe. Longstanding hotels are no ex-ception to this trend, with many closing for refur-bishment.

While another strategy that is proving popular among hotel operators is to repurpose emblematic properties into luxury hotels to ensure guests can enjoy a truly memorable stay. Preserving a proper-ty’s historical and unique features in order to make them part of the guest experience adds extra value to the overall service offered.

In some European cities such as Paris, a wave of high quality hotel openings have helped draw more high-end retailers to the area, pushing up the rental prices of retail units on the streets neighbouring the hotels. However, the closure of an emblematic ho-tel has the revere effect on its neighbouring streets, causing retailer rotation to decline and rental in-creases to slow.

With this trend in mind, the current wave of luxury hotel openings and refurbishments in Madrid is set to have very positive repercussions for the city cen-tre’s retail units.

Europe boasts a very strong hotel supply. Four of the world’s top 10 countries with the highest number of luxury hotels are european.

1. United States 1,203

2. Italy 237

3. United Kindom 189

4. China 168

5. France 168

6. Mexico 161

7. Thailand 135

8. Spain 124

9. Canada 114

10. India 106

TOP 10 COUNTRIES FOR LUXURY TOURISMNO. OF LUXURY HOTELS

THE GLOBAL IMPACT OF TOURISMGDP AND EMPLOYMENT

OF THE WORLD GDP

1 IN EVERY 10 JOBSAROUND THE WORLD IS RELATED TO TOURISM AND TRAVELLING

10.4

Above:Centro Canalejas Madrid, which will be home to the Four Seasons hotel

Left:Hôtel Barrière Le Fouquet’sParis

AVERAGE STAY IN SPAIN’S HOTELS BY CATEGORY AVERAGE NO. OF DAYS. 2018 JAN-SEP.

5*

3.56 3.50 3.42

2.34 2.17

4* 3* 2* 1*

Source: Five Star Alliance

Source: World Travel & Tourism Council. Travel & Tourism Economic Impact 2018. World.

Source: INE. Hotel Occupancy Survey.



Partnerships between hotels and major retailersRetailers are no longer just interested in opening physical stores, they are opening restaurants, teaming up with luxury hotels and can now be found in any space that offers its customers a unique experience

The most prestigious hotels in the world are improving their design and retail services in a bid to win over their guests who are becoming increasingly

demanding and expecting ever-higher stand-ards. As such, they are focusing on offering new experiences that appeal to all the senses as part of a wholly unique service.

Today’s guests are not just looking for quality accommodation in which they can stay, they are also looking for a hotel that goes the extra mile to offer them just that bit more to ensure their stay is a truly memorable experience. Design, ar-chitecture and decor are key, not only to provide a good hotel service, but also to create that all-important experience to remember.

In order to create unique and luxurious spaces, some major hotel chains have joined forces with the world’s most influential contemporary de-signers who are leaving their mark on emblem-atic hotels all over the world. Some designers such as Óscar de la Renta, Diane von Fursten-berg, Salvatore Ferragamo, Christian Lacroix, Ralph Lauren and Bottega Veneta have teamed up with different operators to design and deco-rate some of their most iconic hotels. The con-tributions of these designers are a major draw for the loyal followers of these brands.

For 34 years Coco Chanel lived in the suite at Paris’ Ritz Hotel, the suite which now bears her name and retains her unmistakable essence. Over the years she gradually adapted its décor and style to her tastes, and today the luxury of staying in the suite is reserved for the wealthiest of guests (with prices starting from €25,000 per night).

BVLGARI

VERSACE

CAMPER

MOSCHINO

MILAN, LONDON, BALI, BEIJING, DUBAI, SHANGHAIUPCOMING OPENINGS: MOSCOW, PARIS, TOKYOROOMS

ROOMS

ROOMS

ROOMS

BARCELONA, BERLIN

MILAN

GOLD COAST (AUSTRALIA), DUBAI

488

415

GIORGIO ARMANI

ROOMS

MILAN, DUBAI255

76

65

Right:Karl Lagerfeld. Hotel Crillon Paris

TOP HOTELSFASHION BRANDS



Retailers have identified the potential of the hotel sector as a means of diversification. Trusting in a blend of creativity, style, comfort and good taste, they have forged partnerships with major hotel chains. For instance, in 2016 Tommy Hilfiger acquired the Raleigh hotel in Miami to convert it into a luxury hotel-bou-tique where, by paying an annual fee, mem-bers can gain priority for reservations and use the hotel’s services.

Other brands have gone one step further, extending their own brand throughout the hotel market. Bvlgari has been a trailblazer in this regard, after opening its first hotel in Mi-lan in 2004, it created its own brand, Bvlgari Hotels & Resorts, which can now be found in London, Bali, Beijing, Dubai and Shanghai, with openings planned for Moscow and Paris in 2020 and Tokyo in 2022.

The Palazzo Versace Gold Coast, located on Australia’s Gold Coast, was designed by Gi-anni Versace to express the luxury, glamour, sophistication and class offered by this fash-ion brand in the form of a six-star hotel.

LVMH group expands with Cheval Blanc ho-tels opening in Courchevel, Saint-Barthélé-my and the Maldives, in addition to those planned for 2020 in Paris and Bali.

Armani’s two hotels invite guests to “Stay with Armani”. The first, located in the iconic Burj Khalifa building, the tallest tower in the world, is directly connected to the largest shopping centre in the world, the Dubai Mall. While the second, in Milan, the heart of the Italian fashion world, features a boutique in each room offering guests the chance to pur-chase a range of designs from the brand.

Another hotel in Milan is the Maison Moschi-no. Its rooms are lavishly decorated with 16 different styles, ranging from forest settings, lamps shaped like dresses and a plethora of the highest quality fabrics on display in the reception area. The hotel is the perfect show-case for high-end goods, with all items avail-able for purchase.

The so-called kaiser of fashion, Karl Lagerfeld, who has decorated a number of hotel rooms to date, is set to expand his personal brand by opening his own chain of hotels, restaurants and nightclubs. While, the head creative direc-tor of Chanel and Fendi is set to open his six-star hotel under the Brandmark Collective BV brand in Macau in 2019.

In Spain, Casa Camper, the hotel chain run by the Spanish footwear specialists, boasts a total of two hotels, one in Barcelona and one in Berlin.

In Madrid, a standout example is the five-star Puerta de América hotel, located at Avenida de América 41. A true icon of cutting-edge de-sign in Spain and around the world, each of its 12 floors was created by a renowned architect or designer, including France’s Jean Nouvel, Japan’s Arata Isozaki, the UK’s Norman Fos-ter and David Chipperfield, Iraq’s Zaha Hadid and Spain’s Javier Mariscal and Victorio & Lucchino.

Retailers have identified the potential of the hotel

sector as a means of diversification.

Above:Christian LacroixHotel Le Petit Moulin Paris

Right:Christian DiorSuite del Hotel St. Regis New York

Above:Coco Chanel Suite Hotel Ritz Paris

Right:Diane von FurtensbergHotel Claridge’sLondon



The Parisian hotel sector is clearly investing in the luxury segment. One of the reasons for this is that operators are looking to capi-talise on Paris’ growth potential, which has

been boosted by the need to refurbish several hotels in order to bring their offering into line with what is expected by increasingly demanding overseas visi-tors. Other factors include competition from other European destinations and the rise of new types of accommodation, such as Airbnb, which is prompt-ing hotels to seek new strategies to stand out from the crowd.

Additionally, in July 2009 France’s hotel rating sys-tem was updated, incorporating the Palace category for exceptional five-star establishments that help to promote French culture and enhance the appeal of France as a destination. The ambition to achieve this classification has prompted many well-established hotels to invest in significant refurbishments and reno-vations.

The number of luxury hotel rooms has significantly spiked in recent years. This rise is down to newcomers – the Shangri-La in 2010, the Manda-rin Oriental in 2011 and The Penin-sula in 2014 – and the refurbishment and extension of other existing hotels such as the Ritz, the Crillon, Barrière Le Fouquet’s, the Bristol, the Prince de Galles and the Plaza Athénée.

Although it is difficult to pinpoint a clear cause-effect relationship be-tween luxury hotel openings and retail unit rental increases, this phe-nomenon has been observed in sev-eral areas of Paris. For example, fol-lowing the opening of the Mandarin Oriental on Rue Saint-Honoré, rents climbed 16% above the prime rent between 2011 and 2014. Two years after the Plaza Athénée opened in 2014, rents on Avenue Montaigne grew to top the prime rent by 21%. In contrast, during the same period, rents on Boulevard Raspail fell to 15% below the prime rent af-ter the Hotel Lutetia closed for refurbishment works. However, it must be mentioned that the popularity of the Boulevard Raspail area has dwindled in recent years in general.

The number of luxury hotel rooms has significantly spiked in recent years.

Left:Hotel Mandarin Oriental Paris

Past & present trends: ParisMany retailers have been drawn in by the openings of impressive luxury hotels, seeking new pitches on neighbouring streets where they can showcase their brands



RESEARCH

14 | KNIGHTFRANK.ES

Avenida de los Campos Eliseos. Paris

1. Lutetia45 Boulevard Raspail Opened 2018231 rooms

2. Hôtel Crillon10 Place de la ConcordeOpened 2017124 rooms

3. Barrière le Fouquet’s46 Avenue George VOpened 201781 rooms

4. Ritz Paris15 Place Vendôme Opened 2017159 rooms

5. Hôtel Le Bristol112 Rue du Faubourg Saint-HonoréOpened 2016190 rooms

6. Plaza Athénée25 Avenue Montaigne Opened 2014208 rooms

7. Prince de Galles33 Avenue George VOpened 2013159 rooms

8. Hôtel George V31 Avenue George VOpened 2013244 rooms

9. Hôtel CostesRue Saint-HonoréOpened 201982 rooms

9. Hôtel Fauchon L’Hôtel11 Place de la MadeleineOpened 201854 rooms

10. Nolinski Paris16 Avenue de l’OpéraOpened 201645 rooms

11. Le Roch Hôtel & Spa28 Rue Saint-RochOpened 201637 rooms

12. La Réserve Hôtel and Spa42 Avenue GabrielOpened 201540 rooms

13. The Peninsula Paris19 Avenue Kléber Opened 2014234 rooms

14. Mandarin Oriental251 Rue Saint HonoréOpened 2011178 rooms

15. Shangri-La10 Avenue D’Iéna Opened 201081 rooms

16. Hôtel Bulgari 30 Avenue George V Opened 202076 rooms

17. Hôtel Cheval Blanc Rue de Rivoli Opened 202050 rooms

18. KimptonBoulevard des Capucines Opened 2020149 rooms

REFORMAS NUEVOS DESARROLLOS

M

AV. DES CHAMPS-ÈLYSÉES

RUE SAINT HONORÉ

AVENUE MONTAIG

NE

AVENU

E DE L´ Ó

PERA

AV

EN

UE

GE

OR

GE

V

PLACE CHARLESDE GAULLE

PLACE DE LA CONCORDE

MUSEO DEL LOUVRE

CHAMP DE MARS

JARDINS DU TROCADERO

ESPLANADE DES INVALIDES

RUE DE BABYLONE RUE DE SÈVRES

BOU

LEV. RASPAIL

BOULEV. SAINT GERMAIN

PLACE VENDÔME

Fuente: Knight Frank

M

M

M

M

M

M

M

M

M

M

M

M

M

M

M

M

M M

M

M

M

M

M

3

8

6

7

5

4

2

1

129 18

1411

10

13

15

PRIME HIGH STREETS

M

M

M

19. So Sofitel Champs-ElyséesOpened 2022100 rooms

9

16

17

19



PLAZA ATHÉNÉE. 25 AVENUE MONTAIGNE

Reopened in 2014 as a Palace category establishment, this hotel has been one of the true gems of the international hotel scene since it very first opened in 1913, boasting unique Art Deco-inspired features and surrounded by haute-couture boutiques. Many brands have opted for exclusive pitches on Avenue Montaigne, in Paris’s prestigious Golden Triangle, where a range of new retail-ers have opened alongside existing retailers, who have strengthened their networks with flagships offering the lat-est products on the market.

YEAR MAJOR OPENINGS

2012: Dsquared2, Chloé, Moynat, Balenciaga, Tom Ford, Ports 1961

2013: Valentino, Viktor & Rolf, Dior Parfums, Tom Ford

2014: Gianfranco Lotti, Exemplaire, Lyubov

2015: Mulberry (relocation), Missoni (relocation), Tory Burch, La Prairie, Alexander McQueen

2016: Fendi, Brioni, Furla (relocation), Marc Jacobs (relocation), Paul Smith (relocation)

2017: Dior (pop-up), Stella McCartney, Christofle, David Morris, Guerlain (relocation)

2018: Chanel, Pucci (pop-up), Moschino (relocation), Bilionaire, Pomellato (relocation)

YEAR MAJOR OPENINGS

2012: Chanel, Escada (relocation), Revillon (relocation), Fendi (relocation)

2013: Armani, Saint Laurent, Givenchy, Pucci (relocation)

2014: Yves Salomon, Céline (relocation)

2015: Extensions or reforms as Jimmy Choo or Ricci

2016: Dior Joaillerie, Loro Piana (relocation), Chloé (relocation)

2017: Balenciaga, Shiatzy Chen

2018: Miu Miu, Roberto Cavalli (pop-up)

YEAR MAJOR OPENINGS

2012: Paul Smith y Céline opened in calle de Grenelle (close to calle Sèvres), Louis Vuitton (ampliación)

2013: Shang Xia, Omega, Berluti

2014: Moncler y Salvatore Ferragamo opened in close streets

2015: No Openings

2016: Dsquared2 in calle de Grenelle

2017: No Openings

2018: No Openings

VARIATION IN HIGH STREET RENTS IN PARISTHE IMPACT OF LUXURY HOTEL OPENINGS

LUTETIA. 45 BOULEVARD RASPAIL

Hôtel Lutetia closed for refurbish-ment works in 2014, a time when the number of high-end retail openings in the area had begun to slow follow-ing an exceptionally active period. Between 2010 and 2014, openings in-cluded Hermès and Ralph Lauren in 2010, Céline in 2011, Louis Vuitton in 2012 and Berluti in 2013, to name but a few. Tenant rotation ground to a halt after the hotel closed.

MANDARIN ORIENTAL. 251 RUE SAINT HONORÉ

The Hotel Mandarin Oriental, built in 2011, has clearly been one of the driving forces behind the luxury trend on Rue Saint-Honoré cur-rently one of the most vibrant streets in Paris. Between 2012 and 2017, this avenue accounted for 18% of luxury openings in Paris, and a further third of all openings in 2018-2019, com-fortably ahead of Avenue Montaigne (12%) and Rue Faubourg Saint-Hon-oré (12%).

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012

2012

2012

2013

2013

2013

2014

2014

2014

2015

2015

2015

2016

2016

2016

2017

2017

2017

2018

2018

2018

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

RUE SAINT- HONORÉ

AVENUE MONTAIGNE

RUE DE SÊVRES

+ 16 PERCENTAGE POINTSabove prime rental growth between 2011 and 2014

+ 21 PERCENTAGE POINTSabove prime rental growth between 2014 and 2016

RUE SAINT HONORÉ

RENTAL FORECAST WITHOUT HOTEL MANDARIN ORIENTAL

PRIME RENTAL AVERAGE

AVENUE MONTAIGNE PRIME RENTS

RENTAL FORECAST WITHOUT PLAZA ATHÉNÉE


Hotelopening

Hotelopening

RUE DE SÈVRES

RENTAL FORECAST WITHOUT HOTEL LUTETIA CLOSURE


- 15 PERCENTAGE POINTSabove prime rental growth between 2014 and 2016

HOTELS & RETAIL

KNIGHTFRANK.ES | 17

Hotelclosure

12,000

10,000

8,000

6,000

4,000

2,1000

0



What´s happening in Madrid

Madrid’s wealth of historical and cul-tural heritage, extensive gardens, gastronomical delights, world-re-nowned fashion scene and vibrant

leisure offering, make it one the top go-to tourist destinations in both Spain and Europe, convert-ing the tourism sector into one of the key drivers of the city’s economy.

Madrid ranks second in the Relative Tourism Competitiveness Monitor for Spanish Cities, as measured by Exceltur, and is also second in terms of tourist intake in Spain, behind first-placed Bar-celona. It is therefore one of Spain’s strongest cit-ies in this sector, and each year is attracting a rap-idly growing number of overseas visitors.

Madrid is at an unprecedented juncture, the positive forecasts for the future of the city have attracted investors and sparked a wave of hotel refurbishment projects

Right: Centro Canalejas Madrid, which will be home to the Four Seasons hotel

Tourism in Madrid



When visiting Madrid, many tourists opt to stay in one of the more than 200 hotels in the city. The majority of overseas tourists that choose this type of accommodation are European (28%), followed by Latin Americans (12%) and Americans (7%).

The most common type of hotel within Madrid’s ex-tensive supply is the four-star category, with 5-star, 5-star Luxury and 5-star Grand Luxe categories far more exclusive, and accounting for a total of around 11%. The Central district is home to the lion’s share of tourist accommodation, accounting for almost half of the hotels in Madrid. However, the city cen-tre hasn’t traditionally been home to Grand Luxe hotels, with just two hotels falling into this category,

one in the Salamanca district and the other in the Re-tiro district. The opening of the Four Seasons hotel in the Centro Canalejas will be the very first Grand Luxe hotel to be located in the Central district.

A trend of high quality tourism is also gaining trac-tion, attracting tourists who have longer average stays and higher average spends. The combination of all these factors is prompting some of the world’s leading hotel groups, such as Four Seasons, Marriott and Hyatt, to home in on Spain as a location for ex-pansion.

According to official sources, 2017 was a record-breaking year, with more than 9 million tourists visiting the city. During the first seven months of 2018, this figure rose once again – up 2.6% y-o-y – meaning this year looks set to enter the record books once again.

Overseas tourists are spending more and more money in Madrid each year. In the first three quarters of 2018, the average overseas tourist spend was up 2.3% y-o-y, making Madrid the region with the greatest average daily spend in Spain – at €240 – ahead of Catalonia’s €200 and the national average of €145.

DEMANDA HOTELERA EN LA CIUDAD DE MADRID POR MESES

NO. OF VISITORS

HOTEL SUPPLY IN MADRID BY DISTRICT*% OF EACH HOTEL TYPE BY DISTRICT

HOTEL SUPPLY IN MADRID BY HOTEL TYPENO. OF ROOMS AND NO. OF HOTELS AS A % IN MADRID

HOTELS BY CATEGORYCENTRAL DISTRICT

Source: IET | INE | Knight Frank Research

Source: Ayuntamiento de Madrid

Source: Ayuntamiento de Madrid

Source: Ayuntamiento de Madrid Source: Ayuntamiento de Madrid *Entre paréntesis el número total de hoteles en cada distrito Source: Ayuntamiento de Madrid

4* 3* 2* 5*L 1* 5* 45% 31% 11% 10% 3% 1%

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

T1

2015

JAN

CENTRO(114)

ARGANZU.(8)

RETIRO(10)

CHAMARTÍN(12)

TETUÁN(15)

CHAMBERÍ(20)

FUENCARRALEL PARDO (9)

MONCLOAARAVACA (12)

SALAMANCA(33)

FEB MAR APR MAY JUN JUL AGO SEP OCT NOV DIC

2016 2017 2018

T4T2 T3

TOTAL TOURIST SPEND IN MADRIDOVERSEAS TOURISTS

OVERNIGHT HOTEL STAYS IN MADRIDNATIONAL AND OVERSEAS TOURISTS

900,000

850,000

800,000

750,000

700,000

650,000

600,000

550,000

500,000

100

50

0

5*GL

5*GL

5*L

5*

4*

3*

2*

1*

5*L 5* 4* 3* 1*2*

2016

National tourists

Milli

ons

Overseas tourists

2017 2018

1999 01 03 05 09 07 09 11 13 15 2017

12

10

8

6

4

2

0

24,875

5,622

% hotels

NO. rooms

4,214

1,573 691312

366

53%

9%8%5%

23%

1% 1%

Above: VP España DesignMadrid.





3

4

7

11

1

5

8 2

12

9

6

1. Gran Hotel Inglés 5*Echegaray 8Opened april 201848 rooms

2. Hyatt Centric 5*Gran Vía 31Opened december 2017175 rooms

3. Aloft Gran Vía 4*Jacometrezo 4-6-8Opened february/march 2019139 rooms

4. Plaza de las Descalzas 5*Plaza de las Descalzas 3Opened end of 2019180 rooms

5. Marriott W 5*Carrera de San Jerónimo 9-11Opened june 2019141 rooms

6. VP España Design 5*Plaza de España 5Opened may 2018214 rooms

7. Pestana Plaza Mayor 4*Plaza Mayor 28-29 Opened april 201987 rooms

8. Hotel Pestana CR7 4*Gran Vía 29Opened january 2020160 rooms

9. Barceló Torre de Madrid 5*Plaza España 18Opened january 2017256 rooms

10. Four Seasons Canalejas 5*GLCentro CanalejasOpened january 2019200 rooms

11. Teatro Albéniz 5*Paz 11Opened june 2019N/A

12. Riu Edificio Plaza España 4*Gran Vía 84Opened july 2019589 rooms

Right and down: Hotel Hyatt CentricMadrid

LARGE HOTEL PROJECTS TO BE COMPLETED IN MADRID BY 2020

NEWROOMS IN5* HOTELS

12

+1,200

KNIGHTFRANK.ES | 23

Hotel openingsin Madridcity centre

Nike Primark

MangoZara

PLAZA DE

CALLAO

Zara

H&M

Desigual

Pronovias

Zara

Apple

Aristocrazy

PUERTA DEL SOL

PLAZA DE LAS DESCALZAS

Aristocrazy

Michael Kors

Adidas

New Balance

Mango

Pepe JeansEl Corte Inglés

C A L L E G R A N V Í A

G R A N V Í A

G R A N V Í A

C A L L E M A Y O R

CA

LLE

DE

L A M

ON

TER

A

C A L L E A L C A L Á

RECENT REFURBISHMENT PROJECTS

UPCOMING REFURBISHMENT PROJECTS

RECENT NEW-BUILD PROJECTS

UPCOMING NEW-BUILD PROJECTS

PRIME HIGH STREETS

PLAZA DE ESPAÑA

10



Gran Hotel Inglés

The city centre’s very first luxury hotel – located in the heart of the Letras neigh-bourhood – recently reopened thanks to the Hiffen Away Hotels group, specialists in restoring historic hotels to their origi-nal splendour. The restoration project was inspired by the 1920s, preserving the original columns and lamps and reducing the number of rooms in the hotel in order to create more spacious rooms – with the smallest room now comprising 27 sqm.

Hyatt Centric

This hotel, located on Gran Vía, opened as Spain’s first Hyatt Centric in a former office building. It features a restaurant on the first floor “Hielo y Carbón” (Ice and Charcoal), which combines Peruvian and Spanish cuisine in an open-plan space that boasts fabulous views out onto Gran Vía. Its top floor houses its recently un-veiled rooftop terrace “El jardín de Diana” (Diana’s garden), which takes its name from a five-metre statue designed specifi-cally for this hotel.

Four Seasons Hotel Madrid in the Canale-jas Centre Madrid project.

The Canalejas Centre Madrid will be home to the first hotel of the prestigious Four Sea-sons brand in Spain and one of their most exclusive in Europe. 200 rooms in the very heart of Madrid which, together with a pre-mium 5* service, are ready to captivate high-level international tourism.

The project is the most important in the capital and will regenerate the central area at the junction of the Calle Alcalá, Sevilla, Carrera de San Jerónimo y plaza de Canale-jas. With the opening expected to be at the end of 2019, the lower floors will house a 45 boutique shopping gallery and the upper floors, 22 luxury apartments with 5* service from the Four Seasons hotel and the best views of the city.

Teatro Albéniz

After remaining closed for a decade, the former Albéniz theatre will be Iberostar’s second hotel in Madrid. Madrid’s regional government listed the theatre as a Property of Heritage Interest, authorising any use for the property, as long as it was compatible with the nature of the space. The owners are

obliged to preserve the hall, stage, entrances to all three levels of the theatre and its stair-cases, which will remain a fundamental part of the property’s interior.

Hotel Marriot

Opposite the Centro Canalejas, the for-mer Hotel Asturias will be brought back to life by the hotel chain W, part of the Mar-riott Starwood group. Guests will be able to enjoy the philosophy of W’s Whatever/Whenever service, as well as the exclusive Madrid W Happenings, offering both guests and residents the very latest in fash-ion, design and music.

Plaza de las Descalzas

The building, acquired KKH Property In-vestors from the Fundación Montemadrid in 2016 to convert it into a luxury hotel, is located opposite the Descalzas Reales monastery, formerly the Monte de Piedad headquarters. It features a façade that dates to 1733 and is listed as being of Cultural In-terest. The detailed sectoral plan (plan es-pecial) to build a luxury hotel in this period property has already been approved by the City Council.

The most exclusivenew hotels in the centre of Madrid

RECENT OPENINGS

UPCOMING OPENINGS

Right:Hotel Hyatt CentricMadrid

Above:Gran Hotel InglésMadrid

Barceló Torre de Madrid 5*Plaza España 18

Heritage Madrid Hotel 5*Calle Diego de León 43

Aloft Gran Vía 4*Calle Jacometrezo 4-6-8

Ritz Mandarin Oriental 5*GLPlaza de la Lealtad 5

Plaza de las Descalzas 5*Plaza de las Descalzas 3

Marriott W 5*Carrera de San Jerónimo 9-11

Hyatt Centric 5*Calle Gran Vía 31

Gran Hotel Inglés 5*Calle Echegaray 8

VP España Design 5*Plaza de España 5

Hotel Pestana CR7 4*Gran Vía 29

2017

2018

2019

2020

Four Seasons Canalejas 5*GL Centro Canalejas

Teatro Albéniz 5* Calle de la Paz 11

Pestana Plaza Mayor 4*Plaza Mayor 28-29

Riu Edificio Plaza España 4*Gran Vía 84



FUENCARRAL

AVERAGE PRIMEThe best retail units on Calle Preciados have traditionally had the highest rents in Madrid, but in recent years they have been overtaken by Gran Vía, Puerta del

Sol and Calle Fuencarral, given the rising number of retailers looking for space in the city centre.

There are currently several retail projects under development in the heart of the city. With many of these located on Gran Vía, they are set to raise the profile of the street’s retail offering, and put the high street on the radar of a number of inter-national retailer. Growing attention from inter-national brands will push rents up even higher on these streets, however, this won’t be the only factor driving transformation in this area. If Paris

is taken as a case in point, where the open-ing of five-star hotels has sparked rental in-creases in the retail units located on streets in their vicinity, the wide range of luxury hotels due to open in Madrid are set to drive prime high street rents upwards in a similar fashion.

With 12 new hotels set to open in the centre of Madrid by 2020, the number of 5-star ho-tel rooms will increase by 1,200, almost dou-bling current supply and with an unprece-dented density of luxury hotels in this zone. This is expected to drive up both the quality and quantity of tourism in the city, drawing luxury and high-end buyers into these areas. Using Paris once more as an example, where after many luxury hotel refurbishments high street rental prices have risen by between 15 and 20 percentage points above the average prime rents, high street rents in the centre of Madrid can be expected to follow a simi-lar pattern. We therefore expect the most prime units in the most privileged locations to benefit most from these new hotel pro-jects.

The large number of luxury accommodations that are to be inaugurated in the Spanish capital, with enhance prime high street rents in a manner similar to that seen in Paris.

HIGH STREET RENTS IN MADRID€/SQM/YEAR

GRAN VÍA

PRECIADOS

FUENCARRAL

Left:Puerta del SolMadrid

Right:Calle Gran Vía

Madrid

Variation in high street rents

GRAN VÍA

AVERAGE PRIME

PRECIADOS

AVERAGE PRIME

3,500

3,000

2,500

2,000

1,500

1,000

500

0

3,500

3,000

2,500

2,000

1,500

1,000

500

0

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2005 06 07 08 09 10 11 12 13 14 15 16 17 2018

2005 06 07 08 09 10 11 12 13 14 15 16 17 2018

2005 06 07 08 09 10 11 12 13 14 15 16 17 2018

RESEARCH

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