Hong Kong’s Platinum Estates plans luxury hotel in Spain to tap outbound Chinese tourist growth
Hong Kong family office Platinum Estates has announced its third luxury hotel project in Spain as part of a strategy to tap the surge in Chinese tourists to the country.
The five-star hotel, under the W Hotel brand managed by Marriott International, is slated to open in 2021 on a beachfront in Marbella, a resort city in southern Spain.
Platinum Estates acquired the 170,000 square metre plot of land at the end of 2015 in order to develop it into a luxury resort, with a 200 bedroom hotel and around 100 residences comprising apartments and villas. The land cost was €50 million (US$54.3 million) and construction is expected to cost about €120 million.
The boutique real estate investment firm led by Indian textile magnate Harry Mohinani has been focused on purchasing distressed real estate assets and adding value to them.
It has had its sights firmly set on Spain since 2013.
“Marbella is like the central bay of Spain. There hasn’t been a new five star hotel built in the last 15 years [so] the market is crying out for something new,” Mohinani said. “There is a gap and we would like to fill the gap.”
Besides Marbella, the family also owns residential and hotel assets in Madrid and Barcelona, including Hotel Asturias Madrid, which will be converted into another W Hotel set to open in 2019.
Since 2013 there have been many big changes in Spain, such as the increase in tourism, decrease in unemployment rate, favourable taxes and an economy on the upswing, Mohinani said.
The most important reason Platinum Estates invested in the country was because “we saw value”, he added.
Mohinani said the beachfront land in Marbella was unique as it took one year to acquire the separate plots from five different owners.
“There are always opportunities. If you look hard enough you’ll find a window...like this opportunity which didn’t exist but was created by us assembling the land,” he said.
A record 75.3 million tourists visited Spain in 2016, marking the fourth consecutive year of growth and a 10 per cent surge from the previous year, official data shows.
Each foreign tourist spent an average of €1,023, a 3.75 per cent increase over the 2015 figure.
Mohinani said his firm is bullish on the hotel market outlook in Spain given the current high occupancy rate and rapid growth in numbers of tourists from China.
During the week-long Chinese new year holiday this year Chinese outbound travel to Spain grew 88.7 per cent year on year, making the European country the top destination in terms of overseas tourist growth.
While Platinum Estates plans to continue expanding its footprint in Spain, Mohinani said the firm was ready to sell its hotel assets in the UK.
“Brexit didn’t really have impact on the hotel market in London and the market is still doing very well,” he said. Rather, he said it was a good time to exit after acquiring properties in Britain in 2010 in the wake of the financial crisis.