BarcelonaLast week, a record was broken in the Barcelona real estate sector: a foreign individual bought the most expensive apartment in the history of Spain for more than 40 million euros. It has 650 square meters and is part of the Mandarin Oriental luxury residential complex located on Passeig de Gràcia, in the former headquarters of Deutsche Bank. What pushes someone to leave so much money in a home in the center of the Catalan capital? A purely whimsical purchase, a demonstration of “I can buy it and I do” and the profile of the property collector would explain an acquisition of this magnitude.
A bad investment
The director of the Department of Housing and Future at the UPF and the Association of Promoters of Catalonia (APCE), Josep Maria Raya, considers that from a financial point of view it seems difficult for it to be a profitable investment. “Even if we assume a hypothetical rent of more than 50,000 euros per month for 20 years, it is difficult to see it as a good investment”, considers Raya, who also does not see clearly that it is very profitable in the tourist market, since it should first get a license “Any way you look at it, it’s a bad investment,” he concludes. Along the same lines, UPF economics professor José García Montalvo points out that if it were an investment, it would be difficult to make it profitable: “We would have to count on some very rare assumptions.”
Like who buys a Picasso
The CEO of luxury real estate Living, Estrella Serrano, and a real estate executive who wishes to remain anonymous compare the operation to the purchase of a Picasso: an acquisition on a whim that does not seek to have the best of one category, but exclusivity. “It’s a one-of-a-kind product, as is a custom Ferrari. There are no two of them. Whoever buys these assets is a lover of exclusivity with a capital letter: it’s not the best floor; it’s the floor,” adds Serrano.
In fact, it goes further and puts behind it what in the words of one of the gurus of the world of luxury real estate, Jack Cotton, is a property collector: a person who is passionate about real estate and aspires to own the best homes in the world’s major cities. He says the acquisition is the product of a successful triumvirate: the Barcelona brand, the Mandarin Oriental brand and architect Carles Ferrater.
Barcelona, in the league of great real estate assets?
This manager assures that a sale of these characteristics is not bad for the city of Barcelona, as it is a highly exceptional operation that is not comparable to anything in the city or in the entire State. “It is positive because it puts us on an international map of luxury assets, it places us in the Champions League of large cities that have these types of assets”, he emphasizes. However, he considers that in the Catalan capital there is only this asset and that there will hardly be another.
In this sense, Raya believes that this acquisition places Barcelona in the league of the great European capitals: “It is not something exclusive to Barcelona, but it is possibly the pioneer in Spain. In Europe these operations are more common, in cities like Paris and London, for example.” However, he points out that Barcelona has a particularity, which is that it is different in size compared to other capitals: “If you talk about an extension that is what it is and that cannot be extended, that makes it different from Madrid, which has room to cover if it wants to expand, like Paris”.
For Serrano, the operation is not a flower in the desert: “In the Big Apple of New York there are 10 or 15 apartments of 50 million euros, but the rest are 20 or 25 million. And in Plaça Francesc Macià, in the old Winterthur building, there are apartments worth between 10 and 25 million euros. Barcelona is and must be in this market segment,” he points out. In all this what Montalvo sees is a paradox. The investment group bought the building to turn it into a luxury hotel of the Four Seasons chain, but the moratorium on licenses for new hotels in the center of Barcelona imposed in 2015 forced to rethink the project, and the society finally chose to build luxury apartments there. “It was done because they didn’t want to have too many rich people, and look how it has ended up now: with super-megaluxury apartments,” he said. All the experts consulted agree that the operation will not influence the market in any way.