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Back HomeMandarin Oriental teams up with Saudi group to buy Hotel Ritz in Madrid for HK$1.12b
Luxury hotel operator Mandarin Oriental International has teamed up with a private Saudi Arabian multinational group to acquire the 105-year-old Hotel Ritz in central Madrid for €130 million (HK$1.12 billion).
A 50-50 joint venture formed by Mandarin Oriental and The Olayan Group will also spend an extra €90 million to renovate the 167-room hotel in 2017.
“The Olayan Group is no stranger. It has a long and deep relationship with Jardine Matheson dating back to 1970,” Mandarin Oriental chief financial officer, Stuart Dickie, said. Mandarin Oriental is a member of the Jardine Matheson group.
Jardine Matheson and The Olayan Group have jointly invested in various businesses including property in the Middle East in the past 20 years.
The Olayan Group’s global investment team focuses on public and private equities, real estate, fixed-income securities and other specialised assets, according to its website, which does not disclose the value of its investments.
With more mainland tourists visiting Spain, Dickie said the hotel, in a major gateway city, was an important destination for Mandarin Oriental’s luxury brand. The Hotel Ritz’s price tag of HK$1.12 billion works out at HK$6.7 million per room. Dickie said the joint venture acquired the hotel at a price in line with its gross assets of €129 million.
“For such a rare valuable asset, it does not come with a discount,” he said. He said the acquisition was Mandarin Oriental’s second hotel in Spain after Barcelona.
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