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Portuguese Empty Quinta da Marinha’s Housing Stock

7 October 2017

Sheraton Cascais is selling homes at a rate of two per month. The least expensive cost €1.2 million

The property once belonged to the Champalimaud group and was awarded “best resort hotel” by the International Hotel Awards, but eventually went bankrupt and ended up a part of the ECS Capital fund. Currently, it is held by the Arab-owned United Investment Portugal (UIP), which bought the then Viva Marinha a year ago. The renamed Sheraton Cascais Resort residential stock has little left to sell. Of the 29 luxury homes (out of a total of 57) that were still available for sale when the UIP paid €45 million for the former Viva Marinha, 22 sold in less than a year. That is, about two per month, with prices ranging from €1.2 million to €1.7 million.

The surprise here is that, unlike what is customary in the luxury market, most of the houses – almost 40% – were bought by Portuguese, followed by Brazilians. The French come in third. “I confess that the demand from local customers surprised us, especially as the buyers were interested more in the investment, rather than in using the homes for primary residences. But it has to do with the profitability we offer, which is also much less volatile than any investment in the Portuguese banking system or the stock market. In the end, your investment isn’t just on paper; it’s real, there’s masonry, a building, it has furniture…” Carlos Leal, UIP’s CEO, stated, adding that property owner can also lease the property through the hotel to visitors, paying a part of the return.

With the renovation works completed in the residential component of the resort and also in the hotel itself and common areas, the UIP is now preparing for new projects. The Sheraton Cascais Resort, located surrounded by the Sintra Cascais Natural Park, is located in the heart of Quinta da Marinha and is attracting investors interested in the area.  The constructed area itself cannot be expanded, in height or density, due to respect for environmental considerations.

The hotel group will soon announce a new project in Lisbon. “It will be a specific kind of hotel, for a certain niche market that we believe exists and that we have the know-how and the capacity to attend,” Carlos Leal stated, refusing to disclose any further details. But the project will focus on sustainability in an increasingly competitive market. “Before 2008 everyone thought the hotel business was fantastic, one just had open the business and people would come in, and the hotel would turn a profit. But that is not the case; it’s a high-risk business. When there is a crisis, the business takes an immediate hit, and any return can take 12 to 15 years. It’s not like real estate, where you sell today, and you get a return on your investment right away. ”

The capacity at of the Lisbon airport is another challenge, says Carlos Leal. “The number of hotel projects opening in the next 12 to 18 months is scary! And in parallel, the greatest bottleneck is our airport, which is already receiving much higher numbers of passenger arrivals – at least 6 to 8 million more – but has nowhere to grow. I fear that logistics cannot keep pace with demand. Porto does not have this problem because its airport still has a lot of room to grow, but in Lisbon, it is a serious problem and the solution, whatever it may be, could still take four to eight years to implement. Someone should be finding a solution.”

Original Story: Expresso – Marisa Antunes

Translation: Richard Turner