Information on the Target

Minor Hotels is set to introduce the NH Collection brand to the Balearic Islands of Spain with the upcoming opening of NH Collection Ibiza in April. The Sir Joan hotel, located in Ibiza and recently acquired by AX Partners, will undergo a substantial refurbishment to align with the premium standards of the NH Collection brand prior to its relaunch this spring.

The renovation follows a comprehensive upgrade in 2017 and aims to further elevate the quality of facilities and services, which includes a new restaurant and cocktail offerings. This five-star establishment is poised to become a benchmark for premium tourism in Ibiza, delivering unique and unforgettable experiences under the auspices of a respected hotel brand.

Industry Overview in the Target’s Specific Country

The tourism industry in Spain, particularly the Balearic Islands, has consistently been a significant contributor to the national economy. With its stunning landscapes, rich history, and vibrant culture, Spain attracts millions of tourists each year. The Balearic Islands, known for their picturesque beaches and nightlife, are essential to Spain's tourism portfolio, with Ibiza being a leading destination.

In recent years, the islands have witnessed a shifting trend towards premium tourism, with travelers seeking luxury accommodation and experiences. This shift has prompted an increasing number of upscale hotel brands to enter the market, enhancing competition and providing guests with diverse, high-quality options.

The pandemic caused a temporary downturn in tourism, but the market has begun to recover as international travel restrictions have eased. The demand for premium services remains strong, indicating a favorable environment for luxury brands like NH Collection to thrive.

As the Balearic Islands continue to attract a mix of leisure and business travelers, the introduction of premium brands will cater to the evolving preferences of tourists, helping to maintain the region's competitiveness within the global tourism marketplace.

The Rationale Behind the Deal

The introduction of NH Collection into the Balearic Islands marks a strategic expansion for Minor Hotels, providing an opportunity to solidify its presence within the Spanish tourism market. The NH Collection Ibiza will bolster the brand's portfolio, particularly as it coincides with the 10th anniversary of the NH Collection brand, which has established a reputation for quality worldwide.

This new addition not only enhances the hotel offerings in Ibiza but also appeals to the growing demand for luxury accommodations on the island. By leveraging the strong brand recognition and operational expertise of NH Collection, Minor Hotels is well-positioned to attract discerning travelers seeking premium experiences.

Information About the Investor

AX Partners is a private equity real estate investment manager based in Barcelona and Luxembourg, known for its strategic focus on high-end residential and hotel projects. Under the leadership of Aleix Recasens, the firm has successfully implemented a solid investment strategy that has resulted in investments exceeding 300 million euros across various assets.

With a commitment to maintaining a target internal rate of return (IRR) of 10% to 15%, AX Partners engages capital from qualified private investors, family offices, and institutions. The firm’s approach emphasizes risk reduction and transparency, making it a reputable player in the hotel investment market in Spain.

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The investment by AX Partners in the NH Collection Ibiza is seen as a strategic move that capitalizes on the upward trajectory of the premium tourism market in Ibiza. The combination of an established brand with a proven track record, such as NH Collection, and a unique asset like the Sir Joan hotel bodes well for the potential success of this project.

Given the luxurious renovations planned and the hotel’s prime location overlooking the port of Ibiza and the old town, it is likely to attract a high volume of both national and international visitors. This gives the investment strong underlying fundamentals, particularly as the Balearic Islands continue to recover from recent global travel disruptions.

In the context of a growing demand for premium experiences in tourism, the NH Collection Ibiza stands to benefit from a favorable market position. Moreover, the synergy between the strong brand identity of NH Collection and the asset's unique features enhances its appeal, suggesting that this investment could indeed be a sound opportunity for AX Partners.

Overall, the introduction and management of NH Collection in Ibiza represent not only a positive step for Minor Hotels but also a strategic investment for AX Partners, aligning with current trends in the hospitality sector and positioning them for long-term success in a competitive market.

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