The group has signed a management contract with investment groups for the first property in its Bless Collection Hotels range, due to open in Madrid in November.
Palladium will then open its next Bless Collection property in Ibiza next summer, according to chief executive Abel Matutes.
In a statement, Matutes said: “The new upscale brand will leverage our position in the premium market and draws on our existing experience within the luxury and lifestyle sector."
Bless Hotel Madrid will be located on Calle de Velázquez in city centre and will comprise 111 rooms, a rooftop pool, spa, gym, gourmet restaurant, three bars and conference spaces.
Its restaurant menu will be created by Michelin-starred Basque chef, Martin Berasategui.
Spanish hotel operator Palladium currently boasts 48 hotels across six countries.
