APG-backed Azora Europe hotel fund buys two assets in Portugal for € 148 million | New

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Azora has invested 148 million euros to purchase two five-star hotels in the Algarve region of Portugal on behalf of the European Hotel and Accommodation Fund Azora (Azora EH&L) supported by APG.

The Madrid-based European real estate investment manager said his fund had acquired the Tivoli Marina Vilamoura complex and the Tivoli Carvoeiro complex in a sale and management transaction with Minor International (MINT).

The hotels 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 10-year extension options.

Azora EH&L was launched in July 2020 with a seed portfolio of 10 hotel assets and four city hostel assets across Europe.

Following the latest transaction, Azora declared that it had committed more than € 680 million (€ 305 million in equity) on behalf of Azora EH&L who raised an initial amount of € 680 million the last year with the support of a group of global investors, including Dutch pension fund manager APG.

The European value-added hotel fund has a hard capitalization target of 750 million euros, which, when achieved with leverage, will give the fund more than 1.5 billion euros of investment power.

Concha Osácar, one of Azora’s founding partners, said: “We strongly believe that there will be a strong post-pandemic recovery in the European hospitality and leisure sector, with significant pent-up demand after long periods of blackout and restrictions, especially in the sun and at the beach markets.

Osácar said the acquisition is another important step for the fund as it expands its portfolio in Portugal.

Dillip Rajakarier, CEO of Minor International, said: “We are delighted to be able to fulfill another of our commitments to our shareholders by strengthening our balance sheet with this important milestone in such difficult times.

“The transaction further improves the overall return of the Tivoli portfolio, in addition to the previous transaction concluded in 2019. The transactions generated an aggregate annual non-leveraged IRR of 10% for our Tivoli portfolio. “

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