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Zleep Hotel Madrid Airport

In 2019, Commerz Real acquired an vacant office building with around 10,000 square metres of rental space as the first investment for the Commerz Real European Hotel Fund in the immediate vicinity of Madrid Barajas Airport. Just over two years later, a two-star Zleep Hotels brand hotel was opened in this building. The house, which has over 280 rooms, 220 underground parking spaces, a restaurant, lobby, fitness area and a hotel’s own shuttle service to the airport, under the umbrella brand H World International, which also includes Steigenberger and InterCity Hotels.

And with growing success, because the Zleep Hotel is not only popular with passengers and businessmen because of its comfort and proximity to Madrid Airport and the IFEMA Congress Centre. It is also increasingly booked by city travellers because it provides quick and convenient access to the city centre of the popular Spanish metropolis - whether by car or public transport. This is a renovation project that can rightly be described as a pioneering example of the successful transformation of existing properties in general and the hotel asset class in particular.

 

Conversion in stock: the future of construction

Preserving and adapting existing structures instead of demolition and new construction is becoming increasingly important in the real estate industry - both in the context of environmental and economic objectives. This is because the preserving transformation of an existing property not only preserves and further develops tangible, but also intangible assets. 

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Challenges and success factors

Develop a holistic and long-term approach that meets people’s needs and is in line with environmental and cultural aspects while also being economical.
Mario Schüttauf
hausInvest fund manager since 2007

Against this background, the prerequisites for the renovation project in Madrid were favourable: The good price at the time of the building purchase and the existing technical and infrastructural equipment provided an excellent basis for planning the conversion and for successful implementation.

On the other hand, it was challenging to manage such a project remotely. After all, Commerz Real and its main locations in Wiesbaden and Düsseldorf are almost 1,500 kilometres apart from Madrid. This was also an exciting task for H World International, for whom the project meant entering the Spanish market. Thanks to our partnership with project partners, the general contractor we commissioned agreed to send an employee to Spain for the construction phase who knew how to handle the expected compromises and uncertainties, as he was familiar with both Spanish and German administrative practices.

However, the outbreak of the coronavirus pandemic was a challenge that even the most experienced specialist could not have expected. It hit Spain hard and during the strict lockdown the whole country was virtually standing still. Approvals that were urgently needed for the conversion to proceed were missing. The competent authorities could not be reached for a long time.

After the tireless commitment of the project team and all partners involved on site, the conversion project was successfully completed despite all adversities. In December 2022, it was time: The Zleep Hotel Madrid Airport opened its gates - without exceeding the planned construction costs.


Transformational investing: Moving markets sustainably

Conversion of existing assets, revitalisation and energetic refurbishment offer opportunities for positive transformation with the collective power of institutionals markets: Transformational investing, as we call it.

The asset class in particular holds great potential, as Dirk Schuldes, Head of Real Estate Hospitality and Shopping, confirms:  

The hotel asset class is once again clearly in the focus of investors. We are now seeing accommodation figures in many places at the record level of before the coronavirus crisis. In some cases, these values are even exceeded. Instead of new construction activities, however, the focus is increasingly on value-add investments, for example conversions in existing buildings with short-term growth opportunities. For example, our property at Madrid Airport, which we have transformed from an office vacancy into a hotel asset. Here, we deliberately planned ahead during the renovation, so that the hotel can be redesigned relatively easily in the event of long-term needs.
Dirk Schuldes
Head of Hospitality Commerz Real

With our extensive network of experienced experts and external professionals, as well as our long-standing business relationships within the industry, we are the perfect partner for transformational investing. Because with our pooled know-how, we can identify the really good deals at an early stage and buy the right property at the best time at a reasonable price to successfully transform it.

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