Azora picks up another Algarve hotel

Azora has completed the acquisition of the five-star Pestana Blue Alvor, in the Algarve on behalf of its Azora European Hotel & Lodging fund for an undisclosed amount from Pestana Hotel Group.

The 3-year-old resort has close to 500 rooms alongside six restaurants and bars, six indoor and outdoor swimming pools a sports centre and spa.

The all-inclusive hotel is located in Alvor, on the south coast of Portugal’s Algarve, offering excellent access to a number of beaches. It will continue to be operated by the Pestana Hotel Group.

This transaction represents Azora’s fourth acquisition in Portugal and follows the recent acquisitions of the Tivoli Marina Vilamoura resort, the Tivoli Carvoeiro resort and the Vilalara Thalassa Resort, all of which are five-star.

Azora EH&L has now deployed more than €1 billion and is close to 60% committed across 8 transactions and 29 assets with close to 8,000 hotel keys. 

The fund was launched in July 2020 with a seed portfolio of 10 resort hotel assets and 4 urban hotel assets across Europe and held an oversubscribed €815 million final close in September of last year, which gave an implied total investment capacity of more than €1.8 billion.

What They Said

Concha Osácar, one of Azora’s founding partners, said: “We retain our strong conviction on 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. This transaction represents a unique opportunity both to acquire an exceptional resort in a highly appealing location, and to further grow our presence in the Algarve, a region which is already performing close to pre-covid levels thanks to its long-term attractive fundamentals. To have deployed close to 60% of the Fund’s capital so soon after its final close is testament to our team’s expertise and access to unique deal flow across Europe.”

José Theotónio, CEO of the Pestana Hotel Group, said: “The Pestana Blue Alvor is key reference among families and all those who seek a distinctive all-inclusive resort in a region that is recognized as a prime beach destination in the Iberian Peninsula. The Pestana Hotel Group will professionally maintain running all operations in this unique resort.”

The Realities of Resort Investing

Azora’s senior partner Javier Arús recently appeared on a panel discussion at this year’s IHIF and spoke about some of the difficulties experienced when investing in resorts.