In October, Limestone Capital purchased Hotel Axel on Calle de Atocha, Madrid from Hotel Investment Partners (HIP), marking its second hotel acquisition in Spain. In an exclusive interview with Hospitality Investor, Limestone CEO Benjamin Habbel shared further details about the acquisition as well as previously unannounced future plans.
Why Hotel Axel
Speaking about the rationale behind the acquisition of the 88-key hotel located between Plaza Mayor and Park Retiro, Habbel noted there were a number of different factors which made the hotel a great fit such as the company’s interest in operational real estate, lifestyle hospitality and prime city centre locations.
“We’re generally very interested in Madrid as a destination. We think it's a city that's on the rise from a from a tourism perspective as well as culturally. Also we think the asset has a ton of potential; it's a great asset, it’s in a fantastic location – in a city that has a positive macro trend - and we think there's a lot of potential in the building and in the neighbourhood. This checked a lot of boxes for us. Hence, it was something that we were really excited about,” he said.
He added: “We’re always looking for opportunities in prime locations where we can add value through a number of different factors, which could be physical intervention, branding, design intervention, repositioning or management change. There are lots of different factors which can be influenced but the basics for us are always the same; there has to be an opportunity to dramatically change, improve an asset or a business in a prime location.”
Next project details
Separately, in previously unannounced news, Habbel revealed exclusively to Hospitality Investor that in addition to new openings in Majorca, Lisbon and Monte Rosa in the Italian Alps, Limestone plans to expand into another Mediterranean island.
“We haven't made an investment yet but we're expanding onto another island in the Mediterranean which is not announced yet”, Habbel said, adding “We’ve also made an investment into - and essentially co-founded - a company that’s going to be announced in the next couple of weeks, which is a barefoot luxury resort brand focused on islands and remote locations.”
In 2022 Limestone purchased the luxury Camp Zero Resort in the Italian Alps, located in Champoluc, a popular area for skiing, hiking, and mountaineering around the Monte Rosa massif. Habbel noted this recent acquisition will undergo an expansion programme which will see the addition of new rooms and features.
Limestone’s areas of interest
Turning to markets in Europe in which Limestone is currently exploring for future investments, Habbel stated the company has been looking at markets such as Greece as well as those in the German-Speaking Area for a while. He added that while Limestone has never been able to formulate a great strategy for any individual asset, the possibility of opportunities in those markets in the near future gives the company hope that it’s closer to making investments.
By segment, Limestone stressed an interest in the high-end five-star luxury market and noted it was paying attention to trends in the mid-segment, upscale market.
“The luxury market is proving to be very resilient. Even in these economically uncertain times, the high end of the market just keeps on spending. They demand a certain product, they will pay for that product and they are relatively price insensitive. We're building four five-star hotels as we speak and we’re building zero four-star hotels, so that gives an idea of where we’re focused on.
Having said that, we are excited about trends in the mid-segment, upscale market as well where we see a lean luxury/lean lifestyle model emerging. We think there are really interesting new niches in that segment as well.”
Habbel stated Limestone is also looking in the business and city centre categories for deals where the new version of the lifestyle hotel for business and leisure can be established.
He added: “Other things that we’re looking at are tiny houses and nature tourism. People are traveling and they want to be in nature as much as possible, not in big box hotels and I think that that's a very interesting new emerging category.”
ESG
ESG is also a very hot topic in the hospitality sector at the moment and Habbel says it’s no different at Limestone Capital.
“Sustainability and the environment are incredibly central to not just our investment philosophy, not just our operational philosophy but truly the values of our company. We're looking into certifying all of our hotels to be BREAAM certified, all of our hotels are completely non-plastic, we're doing a lot of work on composting, food waste and preservation. It’s central to the company and to our values,” he says.
The strategy
Looking ahead, Habbel noted a continued focus on expansion in the Spanish luxury hospitality market.
“There will always be opportunities in Spain so we will always be looking to expand in the country. Aethos, our lifestyle brand has announced Majorca. It makes a lot of sense for us to continue to expand in the Spanish market and we’ve been looking at a lot of assets.”
However, he noted challenges in relation to saturation in the luxury segment in certain areas as well as challenges in relation to staffing and labour in Europe.
Moving forward though, he noted “We're a multi-platform company at this stage - we've built Aethos as a platform, we've built Emerald Stay as a platform and there are many more platforms on the rise. What we will see with Limestone is a whole array of transactions that fit into various platforms that we build. We’re very strategic, we're vertically integrated and we really like the platform approach.”