Azora buys 5-star hotels for €148m

Madrid-based real estate investment manager, Azora, has agreed to buy two hotels in Portugal.

They are both in the Alagarve region and have been bought on behalf of the Azora European Hotel and Lodging Fund.

The deal is a structured as a sale leaseback transaction for €148 mln, including a variable price, with Minor International (MINT), the international hotel, restaurant and lifestyle group which acquired the NH Hotel Group for €2.3 bn in October 2018.

The two hotels, which comprise the Tivoli Marina Vilamoura resort and the Tivoli Carvoeiro resort, will continue to be operated by NH Hotel Group on behalf of MINT under the Tivoli brand for an initial term of 20 years, with options to extend for a further 10 years.

Azora said it had now committed over €680 mln (€305 mln of equity) on behalf of the fund which achieved a €680 mln first close in summer 2020 and follows Azora’s recent acquisition of the Giverola Resort, a 213 apartment-hotel complex in Spain’s Costa Brava, in April 2021.

The Fund was launched in July 2020 with a seed portfolio of 10 hotel assets and 4 urban hostel assets across Europe.

Concha Osácar, one of Azora’s founding partners, said: ‘We have a strong conviction that there will be a strong post-pandemic recovery in the European hotels and leisure sector, with significant pent-up demand following long periods of lockdowns and restrictions, particularly in the sun and beach markets.’

He added: ‘As we emerge into a post Covid-19 world we have built a strong pipeline of further investment opportunities and are progressing discussions with the owners and operators of some of Europe’s finest hotels, such as the two Tivoli Hotels we are acquiring today, with many of owners seeking to recapitalise and work with a landlord like Azora that understands the dynamics of the sector and can be a long-term partner.”

Dillip Rajakarier, CEO of MINT, said this latest deal followed the sale leaseback of the NH Collection Barcelona Gran Hotel Calderón last month. ‘It reinforces yet again our ability to spot a quality asset, make investments to enhance the value, and subsequently realize such value,’ he said.

‘We are pleased to be able to complete another one of our commitments to our shareholders in strengthening our balance sheet with this milestone in such a challenging time. The transaction further enhances the overall return of the Tivoli portfolio, in addition to the earlier transaction completed in 2019. The transactions generated an overall annual unlevered IRR of high teens for our Tivoli portfolio.’



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