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€1.5bn Azora fund debuts with Costa Brava hotel complex

Madrid-based private equity property manager Azora has acquired the Arenas Resort Giverola, Costa Brava, Spain, from Swiss hotel group Arenas The Resorts.

Azora plans to invest about €40 million on a comprehensive refurbishment and expansion of the existing facilities.

The resort is located in the Tossa del Mar region of north eastern Catalonia and has been acquired on behalf of the Azora European Hotel and Lodging fund and is its first purchase since Azora assembled a seed portfolio ahead of its €680 million first close last summer.

The 35 hectare beachfront resort comprises a 213-apartment hotel complex, as well as a large campsite, five restaurants and bars, sports facilities and pools. Azora has appointed Med Playa, one of Spain’s largest hotel operators, to manage the resort.

Aparthotel complex heading for 4-star rating

Work is already underway to transform the campsite into a modern ‘glamping’ destination. The apartment hotel element will be upgraded to 4-star rating. Work will take place in two phases, the first of which is due to start in November 2021.  Azora and Med Playa will reopen the hotel to the public next June.

“Having completed the initial capital raise for our latest hotel fund last summer, we have patiently observed the sector against the backdrop of the pandemic while assessing a number of opportunities,” Monica Garay, senior partner and head of alternative lodging at Azora, said. “This significant acquisition is our first for the fund since assembling its seed portfolio and presents us with an opportunity to fully reposition an extremely well-located resort in a popular destination area for domestic and international tourists.”

With a first close of €680 million and a hard cap of €750 million, the fund has an implied total capacity of more than €1.5 billion to invest in leisure hotel opportunities across Europe, with a significant proportion of the portfolio expected to be located in Spain, Europe’s most popular “sun & beach” destination.