By Financial Times: How to Spend It
Oct. 11, 2019

Spain’s new prime property hotspots

Spain’s new prime property hotspots
Emerging from the “lost decade” after the financial crash, Spain’s property market is riding a new wave of confidence, spearheaded by Barcelona, Madrid and the Balearics.
Cathy Hawker

In the centre of Barcelona, on the tree-lined Passeig de Gràcia where designer boutiques and grand hotels bookend Gaudí’s modernist façades, Mandarin Oriental is preparing to unveil its first global standalone residences. The Asian luxury hotel group established a 120-room hotel in the city in 2009, but by the end of 2020 it will add 34 residences to its offering within a refurbished office block. A hard-hat tour of the 20-floor building reveals the true splendour of the location as Barcelona unfurls below: the spiked beauty of La Sagrada Familia resides to the left, Eixample’s angular grid stretches out in front, and beyond that is the Mediterranean. Residents of the one- to four-bedroom Mandarin Oriental properties (from €2,300,000 through Savills) will not only benefit from spectacular views but also from the attentive service of 24 full-time staff.

Meanwhile, 600km away in newly reinvigorated Madrid, Four Seasons is preparing for its own special moment in the Spanish sun.

In a few months, it will open the doors to Centro Canalejas Madrid, its first Spanish hotel and residences located within several historical buildings transformed into a new landmark in popular Puerto del Sol. Behind the majestic façade will be a 200-room Four Seasons Hotel, 15,000sq m of luxury retail and, on the top four floors, 22 spacious private residences with contemporary interiors by designer Luis Bustamante. International buyers have been quick to see its appeal, with just three properties left for sale, priced €3,200,000-€6,000,000 through Knight Frank.

Both the Centro Canalejas Madrid and the Mandarin Oriental Residences in Barcelona are significant as Spain’s first branded residences benefiting from hotel-style facilities (from capacious pools and health centres to dedicated teams of private chefs, personal shoppers and concierges). For the first time, these cities can truly compete with New York, London and Paris for best-in-class residential projects. The timing, of course, is not coincidental. After years of catastrophic price falls and planning scandals that left its property market moribund, Spain is riding a wave of confidence and its urban locations are leading the way. Wealthy international buyers come for the value on offer and stay for the hugely appealing lifestyle – an irresistible mix of sunshine, culture, sports and great cuisine.

From 2007, average property prices across Spain fell by at least 31 per cent.
Mark Harvey, Head of the international department at Knight Frank
Spain’s new prime property hotspots
Barcelona, Spain
Spain’s new prime property hotspots
The newly reinvigorated Madrid

“Early signs of recovery began in 2014, and by 2016 to 2017 we were seeing double-digit growth in Mallorca, where prices now exceed pre-crisis levels. Madrid properties were still five per cent under their 2007 peak in June 2019 but have been making up ground fast since 2016.

In fact, Knight Frank’s figures reveal that Madrid’s prime residential homes rose by 8.1 per cent in 2018

(against a global average of 1.3 per cent) with a forecast rise of six per cent for 2019. Of course, prime property prices remain 70 per cent lower than London and 30 per cent lower than those in Berlin, which is likely to appeal to would-be investors. Added to this is the lure of the city’s well-connected Barajas Airport, an invigorating restaurant scene that spans markets to Michelin stars, classical art museums and a dynamic yet elegant city-that-never-sleeps tempo. “Spain is most definitely back, but what buyers look for today is very different from pre-crisis times,” says Hugo Thistlethwayte, head of international residential at Savills. “There’s been a notable shift away from traditional red-roofed Spanish villas on the golf course towards a more urban lifestyle. Buyers want contemporary open-plan apartments where excellent communal facilities improve their lifestyle and increase potential rental returns. They desire somewhere easy to reach so they can take frequent short breaks. That’s why the rock stars of the recovery have been Madrid and Barcelona – real cities with year-round life.”

Current properties that fulfil this brief include an apartment (€6,400,000 through Lucas Fox) in quiet Pedralbes, close to Barcelona’s international schools, that is spread over three floors and offers a private roof terrace and pool. The same estate agent is also listing a property in Madrid – an artfully renovated four-bedroom apartment (€2,300,000) in the leafy Recoletos area of Salamanca.

Meanwhile, to the east of the city in Lavapiés, pleasingly close to El Retiro Park and behind a protected 18th-century façade, Knight Frank is selling 24 clean-lined new homes at Santa Isabel. The remaining one- and two-bedroom residences are priced from €790,000 and come with outdoor space and underground parking.

Spain’s new prime property hotspots

These new projects are attracting an increasingly international clientele.

Many are on the hunt for an experience mixing the best of old and new Barcelona, which Antares – a collection of 89 apartments in a 30-floor building located at the beach end of Avinguda Diagonal – aims to deliver. French architect Odile Decq has designed a curvaceous modern building. Inside, the one- to four-bedroom homes will offer generous terraces and share a 1,000sq m wellness centre. The development is due for completion in July 2020, but sales will launch this autumn – Philippe Camus, CEO of developers The Shaftesbury Asset Management Group, says that select residences will start at €1,000,000, “establishing a new pricing level in a city where the high end experience is not well developed”.

A similar emphasis on celebrating the old and new can be found at Serra 18 in the ancient Gothic Quarter, where new apartments (€545,000-€880,000 through Lucas Fox) are compact but contemporary with high ceilings, and aimed at “the 21st-century buyer”. And there are plenty of elegant apartments replete with modernist details and lofty ceilings among the wide boulevards of Eixample – Barcelona’s “new city”, built in the 19th and 20th century. Casa Burés, however, a complete refurbishment of a modernist palacio into 26 apartments, stands out. The building, designed in 1890 by architect Francesc Berenguer i Mestres, a colleague of Gaudí, had lain empty for decades, but a team of artisans has spent three years hand-polishing 300,000 mosaic tiles, rejuvenating the stone gargoyles and restoring its art nouveau stained glass. The basement has a 24m pool, Jacuzzi with gym and a private dining room, while the roof-terrace pool has scenic views over Barcelona. The properties were launched in 2016 and the final homes for sale are priced from €1,750,000.

Alexander Vaughan, co-founder of Spanish real-estate agent Lucas Fox, which manages the sale of properties at Casa Burés, says that a decade on from the recession, buyers are younger and more discerning. “Millennials are pure urbanites, obsessed with experiences,” he explains. “They want to walk out of their door into cities with a rich gastronomy, a burgeoning cultural scene and good leisure pursuits. They crave authenticity.”

Buyers can find “authenticity” in spades in Palma de Mallorca, thanks to its beautifully preserved gothic district crowned by La Seu, the majestic cathedral facing the Mediterranean. The city is the capital of the Balearic Islands, where, particularly in prime Mallorca and Ibiza, the recovery of the property market has bordered on the miraculous. “The Balearics were the last to fall into recession in Spain and the first to climb out,” says Hans Lenz, managing director of Engel & Völkers (Mallorca southwest). “According to the Notaires Association, average sale prices across the islands have risen 34 per cent in the past six years. In that time, our average sales price has increased from under €850,000 to over €1,600,000 and today is 10 per cent higher than in 2017.”

Mallorca’s global popularity is aided by 15 international schools, Spain’s third largest airport and attractive leisure facilities. Palma – home to over a third of the total population of the Balearics – has an architecturally alluring mix of the very old and very new. “The face of Palma is changing,” says Lenz. “In the past five years, investment by local and national government has been concentrated in the region. The Port Authority is investing €20m on the harbour promenade, while the superyacht marina Club de Mar is spending €50m on refurbishments.” Meanwhile, neglected stone palacios in the narrow lanes of the gothic Old Town have been scrubbed and refurbished – many turned into intimate, privately run hotels; their wooden Moorish doors thrown open to expose inviting shaded courtyards. The centre of Palma, bypassed by travellers a decade ago, is now a weekend hotspot with over 30 boutique hotels.

One of the newest, Can Bordoy, opened in January after a three-year renovation aimed at “celebrating the history and romanticism of the original 15th-century building”, overseen by architects Jaime Oliver and Paloma Hernaiz. There are 24 suites with one of the largest private gardens in Palma, and high-season rates cost from €550 per night. “In the 1980s and ’90s anyone who could afford to would leave the historical city centre for a modern villa in the suburbs, and much of the Old Town did not feel safe after dark,” says Oliver. “Now it is secure and vibrant, filled with great restaurants and hotels – it’s a place where people want to be.”

Oliver and Hernaiz, founders and directors of the architectural practice OHLAB, returned to the city four years ago after 16 years working in New York, Shanghai, Beijing and Madrid. Oliver has seen the changes in Palma first hand. “It has become a destination in itself, separate from the rest of Mallorca with an easy, cultured lifestyle,” he says. OHLAB’s latest project is Can Santacília, a renovated 16th-century house in Palma’s Old Town, accommodating 16 apartments and communal facilities, including a 12m indoor pool, Turkish bath and gym and internal gardens with parking – a rare combination there. Prices range from €295,000 for a studio to €2,975,000 for a three-bedroom penthouse apartment (through Engel & Völkers) spanning over 250sq m.

The Old Town, moreover, has also seen entire palacios transformed into single homes. Right now, buyers can secure a 19th-century pile with eight bedroom suites arranged over four floors for €13,500,000 through Engel & Völkers. That princely sum also secures a garage and a heated indoor pool in addition to a roof terrace with views of the cathedral, Palma port and the Mediterranean. It’s an example of a modern city home imbued with history and sophistication – a combination that is fast becoming a speciality in Spain’s new city hotspots.

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