Information on the Target

The asset formerly known as the Luna Alvor Bay hotel, located in Alvor, Algarve, has been successfully acquired by Golden Monarque. This 4-star establishment features 149 guest units, providing a range of exquisite dining options, a bar, spa facilities, a gym, and a swimming pool, all set within a total construction area of 9,225 square meters. This makes it an ideal getaway for families and vacationers seeking a luxurious experience in a coastal environment.

The hotel’s diverse amenities cater to both leisure and business travelers, contributing to its attractiveness in the competitive hospitality market of the Algarve region.

Industry Overview in Portugal

Portugal's hospitality industry, particularly in popular tourist destinations like Algarve, has shown resilience and substantial growth in recent years. As the country continues to attract millions of international visitors annually, the tourism sector plays a pivotal role in the national economy, accounting for a significant portion of GDP.

The Algarve region, known for its stunning beaches, vibrant culture, and pleasant climate, remains one of the top destinations for tourists in Europe. This high demand for vacation accommodations has driven the expansion and renovation of hospitality properties, particularly in the four-star category, which offers a balance between luxury and affordability.

In recent years, the Portuguese government has also implemented various policies aimed at promoting tourism and further enhancing the infrastructure, which has bolstered investor confidence in the market. This conducive environment for investment has been a key factor in driving hotel acquisitions and renovations.

With the enduring popularity of Portugal as a travel destination, the forecast for the hospitality industry remains optimistic, making it an attractive sector for investors looking for profitable opportunities.

The Rationale Behind the Deal

The decision for Golden Monarque to invest in the Luna Alvor Bay hotel stemmed from the property's strong potential for growth and profitability in a thriving tourism market. The investment of €8 million made in 2022 exemplified a strategic move to capitalize on the increasing demand for quality accommodations in the Algarve region.

Achieving an impressive Internal Rate of Return (IRR) of 20% upon exit at the end of 2023 underscores the strategic foresight of Monarque Funds and their capability to generate substantial returns for their investors within a remarkably short timeframe.

Information About the Investor

Golden Monarque is recognized as a leading investment fund operator focused on the hospitality and tourism sector in Portugal. The firm has established itself by delivering exceptional value to its investors through strategically timed investments in high-potential properties.

With a commitment to enhancing the value of their holdings, Golden Monarque utilizes industry expertise and in-depth market analysis to make informed investment decisions, allowing them to consistently achieve favorable returns for their stakeholders.

View of Dealert

In the opinion of Dealert, Golden Monarque's exit from the Luna Alvor Bay hotel represents a shrewd investment strategy with commendable results. The significant IRR achieved signals the effectiveness of their investment approach in a rapidly growing tourism market.

The swift turnaround within just one year demonstrates not only the fund's capability to identify undervalued assets but also its ability to manage and enhance these properties effectively within a short investment horizon.

Such a high return in a competitive market indicates that the strategic choices made by Golden Monarque could serve as a significant benchmark for future investments in the hospitality sector. Furthermore, the ongoing strength of the Algarve tourism market suggests that similar opportunities may arise for other investors seeking profitable ventures.

Overall, the transaction reflects positively on Golden Monarque's proficiency and provides optimism for potential investors considering participation in the MPHT – Monarque Portugal Hospitality and Tourism Fund, which is currently open for subscriptions.

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