ActivumSG sells Palacio Solecio hotel in Malaga for €51 million

• The original site, an 18^th century Andalusian palace in a state of severe disrepair, was acquired for €8 million
• ActivumSG undertook an extensive and complex restoration process to transform the site into a modern-day, full-service luxury hospitality asset
• Disposal follows the recent successful sale of The Hampton by Hilton Fira Gran Via in Barcelona

Madrid / Málaga, 13 May 2024: ActivumSG, a leading independent pan-European real estate investment manager, has completed the sale of the Palacio Solecio hotel in Malaga. The asset has been purchased for €51 million by an undisclosed buyer.

Originally an 18^th century Andalusian palace, the historic site had fallen into severe disrepair before being acquired by ActivumSG-advised fund Iberia I for €8 million. Working alongside the highly specialized local asset and development management company Tech-Stone Development Services, ActivumSG undertook an extensive and complex restoration process to revitalise the palace and bring it into a state fit for modern-day, full-service luxury hospitality use.

The restoration retained all of the building’s distinctive architecture, with eye-catching historical features including the original staircase and a grand façade adorning the building’s exterior.

During a second phase of redevelopment, ActivumSG and Tech-Stone consolidated and developed three additional abandoned plots of land adjacent to the original site. The extension created 50 rooms, a rooftop bar and swimming pool boasting views over Malaga’s city centre. The original building opened with 68 rooms in 2019 and the second phase opened in 2023.

Totalling over 87,000 sq. ft, Palacio Solecio is situated in Malaga’s historic Old Town, on the doorstep of The Picasso Museum and a 10-minute walk from the seafront. The 118-key asset is currently operated by Marugal Distinctive Hotel Management under a Hotel Management Agreement.

Today’s announcement underlines the increased demand for upscale and luxury hospitality real estate in Spanish cities. According to CBRE, Spain is the most preferred destination in Europe for hospitality investment among real estate investors.

Saul Goldstein, founder and CEO of ActivumSG, said: “This project was a classic ActivumSG investment where we were able to acquire a great site and add value. Here we leveraged our vertically integrated capabilities and revitalised a historic site to create a landmark hotel in one of Spain’s most exciting destinations.

“Given the slower transactional landscape, this sale demonstrates the clear appetite among investors for high-quality, well-located hospitality assets.

“Spanish hotels stand as one of our longest-held conviction calls and sits within our current wider focus on the accommodation or living sectors. Across our direct real estate and corporate platform strategies, we believe there are ongoing opportunities in housing, hospitality and elderly care due to a shortage of high-quality options despite rising consumer demand.”

Brian Betel, Head of Direct Asset Transactions at ActivumSG, said: “Complex repositioning plays like Palacio Solecio are only possible with a genuine in-country presence. You need boots-on-the-ground to identify what are often hidden opportunities and then to deliver what was a comprehensive yet sensitive reimagining of a heritage site. The strong support and collaboration between the City of Malaga and ActivumSG was also critical to the project’s success.

“We remain very active in Spanish hospitality. We are adopting a dual strategy of ground-up development in supply-constrained sub-markets together with acquiring and modernising existing owner-operated hotels to create institutional-quality assets.”

Ashurst acted as legal advisor to the transaction and real estate consultants JLL and Knight Frank acted as commercial advisors.

ActivumSG’s other notable Spanish hospitality investments include:

• The 259-room Nobu hotel in Barcelona, which was acquired in 2021 and extensively redeveloped to create Barcelona’s highest rooftop pool and bar.
• A 471-room luxury hotel on the Barcelona seafront, The SLS Barcelona, set to be delivered later this year. The asset occupies the last seafront plot in Barcelona available for hotel development owing to pipeline restrictions in the city.
• The 161-room Hard Rock Hotel in Madrid, re-positioned from a former municipal office building and sold for €65 million in 2022. 
• The Hampton by Hilton Fira Gran Via in Barcelona, a ground-up development strategically located near a major business conference area that completed in 2021 and sold earlier this year. 

About ActivumSG

ActivumSG is one of Europe’s largest independent real estate investment managers with a proven track record of successful opportunistic and value-add strategies. The manager invests across the capital stack via direct real estate investments, corporate platforms and special situations in order to maximise risk-adjusted returns.

Founded by ex-Cerberus private equity real estate veteran Saul Goldstein, ActivumSG has raised close to €3 billion in discretionary capital from a global mix of institutional investors since 2007.

ActivumSG executes a sector-agnostic strategy and is willing to take a contrarian stance, identifying real estate-related opportunities with strong underlying fundamentals that have been mispriced or overlooked by the market.  

The company prides itself on having a truly local approach to investing, with a decentralised leadership team spread across offices in Germany, Spain, Denmark, the Netherlands and the United Kingdom.

ActivumSG directly and indirectly employs and oversees over 290 professionals, who advise on investments with a combined gross asset value and end development value of over €8 billion.

Media contacts for ActivumSG:
Montfort Communications
Tom Roberts
Aaron Bass

Tel: +44 (0)20 3514 0897
Email: activumsg@montfort.london

www.activumsg.com