In one of the most notable hotel transactions in Spain this year, ActivumSG earlier this month acquired the five-star Fairmont La Hacienda in Spain’s Costa del Sol for €175 million.
Marking a further step in ActivumSG’s luxury-focused strategy targeting resort markets in Southern Europe, which is targeted at resort markets in Southern Europe particularly Spain, the acquisition is an exciting one for the real estate investment manager not only because of its scale and luxury offerings but also due to its strategic fit within ActivumSG’s portfolio, which includes the SLS Barcelona and Nobu Hotel Barcelona.
Why and how?
“It’s such a unique beachfront asset – it has more than 300 rooms and suites, two golf courses overlooking the coast, four swimming pools, seven restaurants and bars, a spa, and more than 700 metres of oceanfront amongst other facilities, which is unparalleled for Spain,” says Brian Betel, head of direct transactions at ActivumSG.
This is as Spain has proven to be a strong performer in the European hotel investment market ranking the top investment destination for the second consecutive year according to CBRE’s 2025 European Hotel Investor Intentions Survey, with the country’s luxury market seeing strong demand. While markets such as Barcelona and Madrid are well-established, destinations like Costa del Sol remain under-served in terms of luxury, lifestyle, and resort properties, and ActivumSG is positioning itself to capitalize.
“We see massive demand in Spain and Southern Europe for resorts with luxury amenities and modern, lifestyle-driven offerings with competitive pricing,” Betel said.
One of the notable aspects of this deal was ActivumSG’s ability to secure the acquisition at what it saw as an optimal entry point. ActivumSG had already been involved with the asset through their portfolio company, Odyssey Hotel Group, which had been managing the hotel since its pre-opening.
“The ActivumSG portfolio company Odyssey Hotel Group (pan-European white label hotel operator) was the tenant under lease and our team had great insight into the hotel’s potential for ramp-up,” Betel said adding “We had been deeply involved with the asset for a long time and had a strong understanding of any issues, which allowed us to properly price this asset turnkey.”
This long-term involvement gave them an edge over other interested parties rumoured to be from Asia and the Middle East. Furthermore, with the acquisition structured as a turnkey transaction, ActivumSG was able to avoid the typical construction risk and other challenges that often accompanies ground-up hotel developments.
Branded residences
Add to that, the attached 42 luxury branded residences tied to the Fairmont brand - being the first in Spain - set to come to market in the coming months, the overall cost of the asset is offset. And as branded residences increasingly become essential components of new hotel developments, commanding sale prices from mid six figures to upwards of €5 million, developers and hotel brands are flocking to the asset class. For ActivumSG, its branded resi sales will help reduce the hotel’s overall investment cost and generate a higher return on equity.
He adds: “In Spain, there's also just a very minimal supply of these hotel branded residence projects and tremendous demand. Given the strength of the second home market, this is quite an interesting component of the deal, and we feel that we will sell them at prices which help de-lever the investment and provide an even better and even stronger return on the hotel investment.”
He notes that ActivumSG’s branded resi strategy is seeing it exploring the repositioning of existing resort hotels to add branded residences.
“While it's not possible on the assets we currently have in Barcelona, we are looking at underwriting of assets in other islands in Spain and other parts of the coast and even some city locations that that can work for branded residences.”
Betel notes that the financing of the deal was another success story, with the financing market for hospitality, particularly in Spain being strong, with favourable loan-to-value (LTV) ratios and competitive interest rates, allowing ActivumSG to secure financing at an attractive cost, making the deal even more accretive for their fund.
“There was quite a lot of competition to finance the assets. The financing structure allows for some release of equity as we sell down the branded residences. That's how we’ll be able to reduce our basis in the hotel over time. As we sell down the branded residences over the next two to three years, that will bring back quite an interesting amount of our cost basis and at a significant profit.” Betel adds.
To the future
Looking ahead, ActivumSG is laser-focused on maximizing the operational potential of Fairmont La Hacienda. With its opening earlier this year, the hotel is already seeing strong demand, particularly for group bookings and MICE events, and ActivumSG is working on capturing strong demand during peak summer seasons and increasing group bookings for MICE events.
“We're seeing a lot of demand in September, October and November for large groups who want to take the entire hotel for a certain number of days. And with the golf, meeting rooms and over 300 guest rooms, we’re able to really attract large luxury group bookings.”
Betel says the focus for now is on ramping up operations in the hotel and on the golf course.
In the long term, Betel sees substantial growth potential for the asset in terms of occupancy rates, ADRs, and overall reputation, pointing to Spain’s growing tourism, the asset’s luxury F&B facilities, and recent developments in Gibraltar Airport which will make the destination more attractive to the high-end European and UK market.
Looking to ActivumSG’s wider strategy, the investment manager plans to expand in Southern Europe, with a particular focus on Spain and other Mediterranean markets, with Betel revealing active exploration of repositioning opportunities across Spain’s luxury hotel sector, including the islands of Majorca and Ibiza, and even looking at assets in Sardinia, Italy.
“We continue to target the Costa del Sol. We continue to believe in a lot of potential for continued growth there, in Spain and Southern Europe,” said Betel.