Explorer Nears €660 Million Deal to Acquire Discovery Fund's Luxury Hotel Portfolio
In a landmark transaction for the Portuguese real estate market, the management firm Explorer is reportedly finalizing the acquisition of a portfolio of luxury hotels and tourism assets from a group of banks for an estimated 660 million euros. The deal centers on the Discovery tourism promotion fund, which holds a collection of premier hospitality properties across Portugal and is currently managed by Explorer itself. The transaction is structured with a significant 500-million-euro loan provided by the selling banks to Explorer, which will in turn inject 160 million euros in equity.
The Discovery fund, established in 2012, includes some of the most recognized names in Portuguese luxury hospitality. Among its key assets are the prestigious Six Senses Douro Valley, the recently launched Octant hotel chain with its eight properties, the Eden Resort, Dolce CampoReal, and the Ramada Lisbon Hotel. The fund's net asset value was reported to be approximately 800 million euros at the close of last year, highlighting the premium quality of the assets involved in the sale.
The primary banking institutions with exposure to the fund are Novobanco, BCP, and Caixa Geral de Depósitos, with Oitante and Banco Montepio also holding stakes. For years, these banks have sought to offload their positions in such funds, which were initially created to manage and recover value from real estate assets acquired during the last financial crisis. These holdings consume significant regulatory capital, and their sale represents a strategic deleveraging for the financial institutions involved.
This acquisition marks a successful culmination of efforts to sell the fund, following a failed attempt in 2021 amidst the economic uncertainty of the pandemic. The current deal's success is attributed to the dramatic recovery and growth of Portugal's tourism sector and the significant appreciation of the underlying assets. The transaction is being viewed by market observers as a strong vote of confidence in the continued strength and investment potential of the Portuguese hospitality industry.
The deal's architecture, involving substantial vendor financing, is a common strategy in large-scale real estate transactions that facilitates the sale by aligning the interests of both buyer and seller. Although final negotiations are still underway, the agreement is poised to be one of the largest real estate deals of the year in Portugal. The move allows Explorer, led by Elizabeth Roth and Rodrigo Guimarães, to consolidate its control over a highly valuable and well-performing portfolio that it already manages.
This strategic acquisition is expected to have a significant impact on the Portuguese luxury hotel market, concentrating ownership of several key properties under Explorer's direct equity control. It underscores a broader trend of private equity actively shaping the future of the nation's tourism infrastructure, capitalizing on the country's sustained appeal as a top global destination. The successful sale of the Discovery fund is a clear signal of a mature and dynamic investment landscape in Portugal.
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