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In the heart of the Retiro Park lies this large lake, a popular spot with the city's residents, who go there to sunbathe or hire rowing boats.

Built between 1634 and 1636 by the architect, Cristobal de Aguilera, this lake was the heart of the Buen Retiro Palace garden  and was used to hold  water shows, such as navy battles or mock battles, and boat rides for the King and Queen and their Court. At that time it was linked by a stream to the chapel of Saint Anthony of Padua, which no longer exists, and the Retiro had its own shipyard to build boats. In the middle of the lake there was an oval-shaped island which was used for theatrical and musical performances.

On the same spot, almost a hundred years later, Farinelli delighted the court of Philip V with his singing. In the last third of the eighteenth century the island in the centre was covered by the waters of the lake and in 1902 the monument to Alfonso XII was erected. Financed by popular subscription, it is an outstanding example of historicist architecture. The monument was designed by José Grases Riera and completed by Teodoro Anasagasti, while the equestrian statue crowning it is the work of Mariano Benlliure.

Currently, the lake offers several activities within the Estanque del Retiro Municipal Sports Centre such as rowing boats(100 boats are available, two of which are accessible to people in wheelchairs), solar boat (wheelchair accessible), solar classroom and and canoeing, aimed at children and young people between the ages of 7 and 26, provided by the Madrid Canoeing Federation.