Madrid-based European private equity real estate manager Azora has acquired the Arenas Resort Giverola, in Costa Brava, Spain from Swiss hotel group Arenas The Resorts.
Spread over 35 hectares in a prime location at the heart of Costa Brava, the beachfront resort comprises a 213 apartment hotel complex, as well as a large campsite.
Located in the popular Tossa del Mar region in north eastern Catalonia, the resort benefits from direct access to two of Costa Brava’s most picturesque beaches, Cala Pola and Cala Giverola.
”The acquisition has been made on behalf of the Azora European Hotel and Lodging, F.C.R. fund and represents the fund’s first purchase since Azora assembled its seed portfolio ahead of a €680 million first close last summer,” said Azora in a statement.
Azora has appointed Med Playa, one of Spain’s largest hotel operators, to manage the resort, strengthening their existing working relationship.
Azora believes there is potential to create value and improve income at the asset, which was originally built in 1988, and plans to invest c. €40 million to carry out a comprehensive refurbishment and expansion of the existing facilities across both the hotel and camping elements.
Work is already underway to transform the campsite into a modern ‘glamping’ destination, which on completion, will offer 125 bungalows, 62 tents and 126 caravan spots. The 213 apartment hotel element will be upgraded to achieve a 4-star rating with work undertaken 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.
In line with its broader approach to ESG, Azora also intends to improve the resort’s environmental credentials, including targeting a BREEAM very good or above certification and improving energy efficiency. Additionally, under Azora’s commitment to contribute to the local economies, it will prioritise partnerships with local suppliers.
Azora is also planning a number of commercial and operational changes to enhance the customer experience, including repairing the historic “camí de ronda” paths that run through the resort.
Monica Garay, Senior Partner and Head of Alternative Lodging at Azora, commented: “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. 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. By utilising our deep asset management expertise we will aim to add value and increase operating income at the resort in order to deliver attractive returns on behalf of its investors.”
“Following a period of limited tourism due to the COVID-19 pandemic, we retain our long-held conviction in the sector as an investment that will continue to be supported by societal trends. With the vaccine roll out successfully underway across Europe we expect a rapid rebound in many parts of the sector as travel and other restrictions are gradually eased. Costa Brava has historically attracted high numbers of tourists, while the resort’s outdoor focus has not only increased its resilience to the impacts of Covid-19, but will also allow it to recover faster than traditional resorts.”
The Giverola Resort will strengthen the current seed portfolio of the Azora European Hotel and Lodging, F.C.R, which already includes 10 hotels secured on launch, with circa 2,670 keys and 4 hostels with circa 1,200 beds, located across Spain, Portugal, Italy and Belgium.
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. Azora will use its significant expertise to implement a value-add strategy for the Fund, through repositioning, refurbishment, and active asset management.