The acquisition was made by an affiliate of the Lone Star Real Estate Fund III, Corporación Betic held by Catalunya Banc, and Algarvetur, with the amount involved in the transaction not being disclosed but being described by Lone Star as being “the largest real estate transaction made in Portugal this year, and one of the biggest since the crisis began”, according to a statement delivered to Dinheiro Vivo.
Lusort
Vilamoura is a resort town which includes the emblematic marina and golf courses, and because of its status as a resort, it is run by a management company responsible for the destination as a whole.
Since 2004 Lusort, part of the Garvecat group which has now been sold to Lone Star, have been running Vilamoura, and the sale will now mean that it will pass over to new management with potential changes to all those living in and running businesses there.
Development potential
The resort covers over 2,000 hectares and includes the 825 berth marina but it is perhaps the more than 700 million square metres of buildable land that have attracted Lone Star to the area, as this offers the construction potential for more than 5,000 properties within close proximity to both the five anchor marina and the beach.
According to Dinheiro Vivo Lone Star has plans to “strengthen and revive” the resort through the implementation of a long-term investment plan.
Juan Pepa, director of Lone Star for Spain and Portugal, said that: “Vilamoura is a unique opportunity for international investors who want to capitalise on the ongoing recovery of Portugal and its real estate sector.”
Lone Star has a history of spotting potential successes that many will be hoping can be replicated in Vilamoura.
History of success
Since the establishment of the first Fund in 1995, Lone Star has organised fourteen private equity funds with aggregate capital commitments totalling over $54 billion.
The company says that they have “vast transactional experience, having closed more than 400 investments in approximately 1,200 transactions at an aggregate purchase price of over $130 billion (including acquisition financing and co-investors)” and the company has been actively investing in Europe for over a decade.
Real estate turnaround
The investment in Vilamoura could potentially indicate a turnaround in the fortunes of the Portuguese real estate market but there is still a need to proceed with caution in the industry according to the head of Portugal’s main estate agents’ association, APEMIP.
Luís Lima from APEMIP said that while the property market is undeniably larger and more stable than in previous years, those in the sector should not get carried away by recent success or they risk repeating the same mistakes of the past.
Property demand
He said: “Demand for our property supply has been growing and consolidating, but we must not allow euphoria to take hold of our mood, at the risk of our losing the control necessary for our market’s balance.”
According to Lima, “there’s still room to grow” in the market, however real estate agents should take their time to ensure past errors are avoided.
A new report also shows that the confidence injected by foreign investment in the market “also woke up the domestic market”, with demand for sale properties last year up 55.2% on 2013 and rental demand up 42.5%.
The positive indicators in the property market all point to recovery but the jewel in the investment crown for the industry will undoubtedly be regarded as Vilamoura thanks to this latest foreign investment.

Author

Originally from the UK, Daisy has been living and working in Portugal for more than 20 years. She has worked in PR, marketing and journalism, and has been the editor of The Portugal News since 2019. Jornalista 7920

Daisy Sampson