Key Takeaways
- Sector: Leisure.
- Geography: Spain.
Analysis
Spring Hotels has completed the acquisition of the Mare Nostrum Resort in southern Tenerife for €430 million, marking the largest single hotel asset transaction in Spain's history.
The off-market deal significantly expands Spring Hotels’ presence in the Canary Islands, adding over 1,000 rooms to its portfolio. The resort, located on the beachfront of Playa de Las Américas in Arona, comprises three properties: the five-star Mediterranean Palace (536 rooms), the five-star Sir Anthony (70 rooms), and the four-star Cleopatra Palace (431 rooms). Additionally, the acquisition includes key entertainment and hospitality venues such as the Hard Rock Café Tenerife, the seafront La Palapa Beach Club, and the Pirámide de Arona auditorium, which seats up to 3,000 guests and houses a major conference centre.
"This acquisition positions us as a benchmark in the sector and broadens our product offering, combining our four-star hotels with luxury tourism products," said Miguel Villarroya, CEO of Spring Hotels. "It demonstrates our capacity for investment and local management."
The transaction raises Spring Hotels' total owned and managed capacity to over 2,300 beds across six hotels, further consolidating its presence in Tenerife, where it already operated three properties. The Mare Nostrum Resort had previously undergone a €56 million refurbishment under Selenta Group, which Brookfield acquired in 2021.
Colliers advised Spring Hotels on the transaction, leveraging its prior knowledge from advising Brookfield during the initial acquisition. "This is the largest deal ever recorded in Spain for an individual hotel asset, executed off-market and led by a hotel chain — clear signs of the current market strength," said Gonzalo Gutiérrez, Managing Director at Colliers. "These high value-added, off-market transactions are a strategic focus for us."
Spring Hotels was advised by AZ Capital as financial advisor and by KPMG on legal, tax, financial, and labour due diligence. Brookfield was advised by Pérez-Llorca, Eastdil Secured, and JLL.
The transaction boosts Spain’s hotel investment volume in the first half of 2025, pushing it 10% above the same period in 2024. It also reaffirms the Canary Islands as the top destination for hotel investment in Spain this year, accounting for nearly 40% of total volume to date.
Canary Islands: A Hotspot for Hotel Investment
The Canary Islands have solidified their position as a prime destination for hotel investment in Spain. In 2024, the region attracted 20 transactions totaling €664 million, surpassing other major destinations like Madrid and Barcelona. The islands benefit from 72.9 million overnight stays annually, with tourism accounting for 35% of the Canary Islands' GDP and 40% of employment.
Investors are drawn to the region's robust tourism infrastructure and consistent demand. Recent investments include Hyatt's acquisition of three hotels in Tenerife for €120 million and Riu Calypso Hotel's €14 million renovation in Fuerteventura. These developments underscore the islands' appeal to both domestic and international investors seeking high returns in the hospitality sector.
Sustainable Growth and Future Outlook
Spring Hotels' acquisition aligns with the broader trend of sustainable growth in the Canary Islands' tourism sector. The region has implemented strategic tools like the Reserve for Investments in the Canary Islands (RIC) and infrastructure investments such as the €550 million expansion of Tenerife South Airport to future-proof its appeal.
As the hospitality industry continues to evolve, the Canary Islands are expected to maintain their status as a leading destination for hotel investment, offering a blend of luxury accommodations and sustainable tourism practices.