For Hong Kong-based boutique property fund Platinum Estates, Spain is the best European destination when it comes to tourism property investment. “The assets are still cheap and we are positive about the booming travelling demand there, especially from Chinese tourists,” said Jonnie Teh, investment director of Platinum Estates, The firm, which is controlled by Indian textile magnate Harry Mohinani, specialises in investing in distressed real estate assets and has bought and sold properties in Hong Kong and London in recent years. It has had its sights firmly set on Spain since 2013. In its latest move, Platinum Estates acquired 170,000 square metres of land in the coastal city of Marbella at the end of last year in order to develop a luxury resort on the beach. The total investment is around € 200 million (HK$1.7 billion), including land cost of € 50 million and a budgeted further € 150 million for the hotel project. It plans to construct a five-star luxury hotel and 120 villas which will be developed alongside the hotel. “Spain has the most potential for growth in Europe,” Teh said. “It is trying hard to tap into Chinese travellers, but is lacking of nice five-star hotels.” Spain is leading the recovery in the euro zone with stronger than expected economic growth. The country’s overall economy grew 3.2 per cent in 2015, accelerating from 1.39 per cent growth in 2014, which ended negative growth seen in the previous three years. The International Monetary Fund forecasts that Spain’s economy will grow 2.7 per cent in 2016 compared with an average of 1.7 per cent for advanced euro zone economies. Tourism has been the key driver. International tourist arrivals in Spain hit all time highs in the first nine months of last year, amounting to 54.5 million visitors, official data shows. Chinese tourists are Spain’s biggest spenders, outstripping Russians, according to consultancy Global Blue, with an estimating average spend of € 1,000 on each purchase . Teh said there were now far fewer distressed assets compared to 2013 when Platinum entered the market, but they still could find projects at a 30 to 40 per cent discount. “We are looking for returns equalling two to three times equity over a five-to-seven-year period,” Teh said, adding that the annual investment return in London has fallen to between 10 per cent to 20 per cent. The fund so far has seven projects under development in Spain, injecting a total of € € 500 million, consisting of residential and hotel properties. They include renovation of a historic Madrid hotel into the first five-star W hotel in the city, with a target opening date of 2018. “We are looking more purchases in Spain, but we need to make decisions faster and faster,” Teh said. China’s property-to-entertainment conglomerate Wanda Group, controlled by the country’s richest man Wang Jianlin, also bought a landmark building in Madrid for € 265 million in 2014.