Portugal: Two five-star Tivoli hotels, operated by NH Hotel Group, have been acquired by Azora Group and its European Hotel and Lodging Fund for €148 million.
The deal has been completed on a sale and manage back transaction with Minor International, which acquired NH Hotel Group for €2.3 billion in October 2018.
Azora, based in Madrid, is a European real estate investment manager established in 2003. The group launched its Fund in July 2020 with a seed portfolio of 10 hotel assets and four urban hostels across Europe.
The two new hotels, which comprise the Tivoli Marina Vilamoura resort and the Tivoli Carvoerio resort, will continue to be operated by NH Hotel Group on behalf of Minor. The agreement is for an initial 20 years, with options to extend for a further 10 years.
Collectively, the properties offer 631 rooms and suites, 12 restaurants and bars, two spas, sports facilities and event space. They are both located in Portugal’s Algarve.
On completion of the deal, Azora has now committed over €680 million (€305 million of equity) on behalf of the Fund. It follows the recent acquisition of the Giverola Resort, an apartment-hotel complex in Spain’s Costa Brava in April this year.
Concha Osácar, co-founder of Azora’s, 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. As we emerge into a post Covid 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.”
“This acquisition represents a rare opportunity to acquire two first class, well operated hotels at an attractive price which we believe will allow us to create long term value for our investors,” he continued. “It is also another important milestone for the Fund as we expand our portfolio into Portugal. We believe strongly in the Algarve’s long-term appeal as a destination for tourism and leisure, and our latest acquisitions are hotels of exceptional quality, in great locations with good access to local amenities, including some of the region’s best golf courses. The Tivoli brand is synonymous with quality and we are pleased to have secured a long-term management contract with Minor and NH Hotels, who we look forward to working with to maintain and further enhance these outstanding hotels.”
Dillip Rajakarier, CEO of Minor International, added: “The transaction reiterates the combined strength of Minor and NH Hotels in the execution of another strategic asset rotation with a respected real estate institutional investor in Europe, following the sale and lease back 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 realise such value. 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. Asset rotation continues to be a part of our long-term strategy, and we will continue to look for opportunities to execute this strategy going forward. Minor is pleased to be in partnership with Azora as we both share the same vision in having a long-term investment approach and emphasis on value creation for stakeholders.”
Azora Group has invested over €4 billion of equity since its inception, and currently manages circa €3.2 billion of assets under management as of December 2020. The group has traditionally focused on residential, hotels, offices and renewable energy, and is currently development new investments in logistics, senior homes and alternative real estate debt.
Minor International focuses on hospitality, restaurants and lifestyle brand distribution. The company is a hotel owner, operator, and investor with a portfolio of 527 hotels under the Anantara, Oaks, Tivoli, NH Collection, NH Hotels, nhow, Elewana, Marriott, Four Seasons, St. Regis, Radisson Blu and Minor International brands.
