Archer Hotel Capital, backed by Singapore’s sovereign wealth fund GIC and Dutch pension powerhouse APG, is entering the Madrid luxury hotel race with a sophisticated rehabilitation plan for the historic Hotel Palace. The two-stage project aims to modernize guest rooms and common areas while preserving the building’s iconic silhouette. Arcadis serves as project manager, with Ruiz-Larrea Arquitectos handling the architectural design and Lázaro Estudio shaping the interior. The initial phase focuses on interior renovations and façade refreshment, with a parallel effort to reinforce the structure and restore the glass dome of the La Rotonda restaurant, all confirmed by private industry sources and reported by EL PERIÓDICO DE ESPAÑA.
Public records from Madrid’s City Council show that representatives from Ruiz-Larrea Arquitectos, Miguel Díaz Martí and Gorka Álvarez Ugalde, met with consular staff earlier this year to outline the reform strategy. The agenda included presentations of ongoing Madrid projects, but the conversations centered on the hotel complex and its future role in the cityscape.
The project sits at 7 Plaza de las Cortes, a site classified as unique and culturally significant under Madrid’s General Urban Planning Plan, which has guided the city since 1997. The hotel, now rebranded as Westin Palace, shares the same level of protection as other major landmarks such as the Royal Palace, Almudena Cathedral, and the Puerta del Sol complex. City officials emphasize comprehensive upgrades that blend architectural integrity with environmental sustainability, along with refined interior layouts and better public spaces. Mariano Fuentes, head of the Urban Development department, notes plans for vertical gardens, new roofing, and high-quality enhancements to accommodate expanding tourism demand.
The five-star complex features 470 rooms and has hosted some of the century’s most prominent figures in culture and science, ranging from García Lorca to Einstein, along with artists like Picasso and Dalí. Built in 1912 on the former site of the Dukes of Medinaceli palace, it became a historic hub in Madrid, later associated with pivotal moments in political history.
Westin Palace is owned by Archer Hotel Capital, a key player reshaping luxury hospitality. In 2021, Archer acquired Hotel Edition, a move that followed a broader trend of high-value asset purchases in a market still adapting to pandemic conditions. The firm has also invested in Hotel Arts in Barcelona. The ownership narrative centers on trophy assets with long-term potential, reflecting a strategy of acquiring landmark properties with stable, enduring appeal.
The race for luxury in Madrid mirrors a century-old ambition. Early 20th-century King Alfonso XIII commissioned the Palace to elevate high-society accommodation, and a similar impulse drives today’s funds toward the capital’s premier luxury hotels. Mariano Fuentes reiterates the importance of promoting high-quality tourism and supporting the hospitality ecosystem to attract new ventures and investments.
Another contemporary development involves Millennium Hospitality, a SOCIMI partly owned by Castlelake and other Spanish institutions. Earlier this year, the company completed the purchase of the building at Calle Zorrilla 19, next to the Congress of Deputies, with plans to turn it into a five-star property. Additional projects include potential openings in Calle Alcalá and the Carrera de San Jerónimo area under brands like Nobu and JW Marriott.
Recent renovations extend to other marquee properties in Madrid’s luxury skyline. The Ritz was acquired by Olayan, the Saudi family’s investment group, for around 130 million euros in 2015 and underwent major modernization between 2018 and 2020, with a budget exceeding 100 million euros. Similar upgrades have touched the Four Seasons, Rosewood Villa Magna, Edition, and other well-known properties—each project underscored by spatial upgrades and refined interiors.
Madrid’s Gran Vía skyline also hosts a forthcoming 6,000-square-foot luxury complex integrating a hotel, dining, a spa, and a private club. The sponsors behind this venture include the Paraguas hotel group, founded by Sandro Silva and Marta Seco, in collaboration with the Doğuş Group.
In the first half of 2022, Spain’s hotel investment reached 1,521 million euros across 68 operations, with urban complexes accounting for 873 million. This marked the third strongest period since 2017. Notable movements include Brookfield’s acquisition of Hotel Princesa Plaza from Colony Star, the sale of Hard Rock Hotel Madrid, and Via Castellana’s purchase by Ibervalles from Millennium. Madrid alone consolidates 35 luxury complexes totaling 5,691 rooms, while Colliers notes that the pandemic boosted luxury investments, rising from 20% to 35% of the market. In 2021, institutions allocated 43% of capital to five-star and ultra-luxury segments.
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