Madrid-based European private equity real estate manager Azora has completed the final close of its latest pan-European hospitality fund, Azora European Hotel & Lodging (Azora EH&L) reaching €815 mln in total commitments plus additional co-investment capital, representing a 36% increase over the original €600 mln target.
Given the strong demand from institutional investors, Azora raised the Fund’s €750 mln hard cap to €815 mln. The increase of the hard cap has allowed Azora to accommodate new investors, comprising a large European pension fund, two large insurance companies (based in Europe and the U.S. respectively) and two European family offices.
Taking financial leverage into account, this provides the Fund with an implied total investment capacity of more than €1.8 bn, of which €730 mln has already been committed, through four transactions (including the seed portfolio). These include two hotels in the Algarve region in Portugal for €148 mln, through a 20-year sale and management transaction with Minor International; the acquisition of the Arenas Resort Giverola in Costa Brava (Spain), prior to a €40 mln repositioning project; and the luxury 5-star Vilalara Thalassa Resort hotel in the Algarve region. These new acquisitions bring the fund's total portfolio to 4,600 keys in tourism-focused hotels, in both sun and beach and urban locations.
The fund invests in European tourism, a segment which Azora believes has a long-term growth trend and is positioned for a clear post-pandemic recovery scenario. It aims to invest both in traditional beach and mountain destinations, as well as in the main European tourist cities.
'This Fund is a continuation of our successful strategy in the hotel sector, which began more than ten years ago,' said Concha Osácar, founding partner at Azora. 'Throughout the pandemic we maintained our long-held conviction on the European leisure hotel and resorts market, which has already allowed us to build a significant high-quality portfolio and to position our Fund ahead of competitors, with a strong pipeline of future opportunities. Our continuous focus on the sector has allowed us to become a leading European player in hospitality and has led us to increase our original target and hard cap to accommodate additional investors´ demand. For our Fund, the pandemic has created and will continue to create additional opportunities over and above those originally envisaged.'
Lazard acted as private placement agent for the fundraise and Freshfields Bruckhaus Deringer has acted as legal counsel.
