OHL clings to Canalejas as it seeks to cash in with Old War Office | Companies

This fall, in which everything is uncertain due to the threat of Covid-19, will be key for the start-up of the Canalejas hotel and commercial complex, in the heart of Madrid. The hotel Four Seasons, five stars and 200 rooms, It has an opening date of September 15. And the developers, led by OHL (50% of the capital), are optimistic with the lease commitments obtained for the shopping and restaurant area, whose start of activity must occur in early 2021.

Canalejas is one of the pieces with which the construction group could make money in the face of the financial difficulties it is going through, but the current plan is to shield this emblematic development in the basket of assets. Mohari, company of the entrepreneur Mark Scheinberg (founder of Poker Stars) has the other half of the capital of a property that combines several historical buildings between the streets of Alcalá, the Carrera de San Jerónimo and Seville, a few meters from the Puerta del Sol. The investment in the buildings was of 215 million and its rehabilitation bring the budget to 500 million.

The value of the investment in the London hotel is 101 million after the deterioration carried out on December 31

The entry of new reference shareholders in OHL, The Mexican family Amodio with 16% and declared intention to rise to positions between 25% and 29%, has made the company review its growth strategy, especially in the concessions market, and each of the possible divestitures .

The departure of Canalejas would strip the group of its main reference in luxury developments at a time of launch affected by the crisis. It would also imply releasing a valuable wild card, of the taste of the creditor banks as collateral. If the situation allows it, the order is to maintain in the medium or long term, comment sources close to the construction company.

The last one to get on the Madrid project has been the real estate investment firm Nuveen Real Estate, which has acquired a premises of 1,000 square meters and two floors in the commercial gallery, which it will rent to Banco Santander. The entity that returns, in this way, to the financial center that was its historic headquarters in Madrid. The book value of 50% of OHL in Canalejas is 156 million. An appraisal that has not suffered deterioration in view of the fact that its target market is “not very sensitive to the effects of Covid-19”, according to OHL’s opinion expressed in different public documents. The company will wait for entry into operation to check performance levels and re-update the recoverable value of its investment.

Divestment in London

The Four Seasons de Canalejas opens on September 15 and the shopping arcade should do so in early 2021

The trick that OHL intends to play in the second semester is the exit of the London project Old War Office, in which the former headquarters of the Ministry of War will be converted into a luxury hotel.

Its 49% stake has a book value of 101 million and that will be the approximate price that the Spanish group can extract from the divestment once the stake suffered an adjustment of 47.6 million as of December 31, 2019. It was in light of the acquisition offers received that OHL believes they are adjusted to the market.


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