Independent European asset manager, ActivumSG, has sold the 118-room Palacio Solecio hotel in Malaga for €51 mln to an undisclosed buyer.
Originally an 18th century Andalusian palace, the historic site had fallen into severe disrepair before being acquired by ActivumSG-advised fund Iberia I for €8 mln.
Working alongside the highly specialised local asset and development management company Tech-Stone Development Services, ActivumSG undertook an extensive restoration process to revitalise the palace and bring it into a state fit for modern-day, full-service luxury hospitality use.
The restoration retained all of the building’s distinctive architecture, with eye-catching historical features including the original staircase and a grand façade adorning the building’s exterior.
During a second phase of redevelopment, ActivumSG and Tech-Stone consolidated and developed three additional abandoned plots of land adjacent to the original site.
The extension created 50 rooms, a rooftop bar and swimming pool boasting views over Malaga’s city centre. The original building opened with 68 rooms in 2019 and the second phase opened in 2023.
Totalling over 87,000 ft2 (8,000 m2), Palacio Solecio is situated in Malaga’s historic Old Town, on the doorstep of The Picasso Museum and a 10-minute walk from the seafront.
The 118-key asset is currently operated by Marugal Distinctive Hotel Management under a hotel management agreement.
Saul Goldstein, founder and CEO of ActivumSG, said: 'This project was a classic ActivumSG investment where we were able to acquire a great site and add value. Here we leveraged our vertically integrated capabilities and revitalised a historic site to create a landmark hotel in one of Spain’s most exciting destinations.
'Given the slower transactional landscape, this sale demonstrates the clear appetite among investors for high-quality, well-located hospitality assets.
'Spanish hotels stand as one of our longest-held conviction calls and sits within our current wider focus on the accommodation or living sectors.
'Across our direct real estate and corporate platform strategies, we believe there are ongoing opportunities in housing, hospitality, and elderly care due to a shortage of high-quality options despite rising consumer demand.'
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Brian Betel, head of direct asset transactions at ActivumSG, said: 'Complex repositioning plays like Palacio Solecio are only possible with a genuine in-country presence.
'You need boots-on-the-ground to identify what are often hidden opportunities and then to deliver what was a comprehensive yet sensitive reimagining of a heritage site. The strong support and collaboration between the City of Malaga and ActivumSG was also critical to the project’s success.
'We remain very active in Spanish hospitality. We are adopting a dual strategy of ground-up development in supply-constrained sub-markets together with acquiring and modernising existing owner-operated hotels to create institutional-quality assets.'
Ashurst acted as legal advisor to the transaction and real estate consultants JLL and Knight Frank acted as commercial advisors.
