Branded residences in Portugal – the future looks bright and sunny

 In Branded Residences, News, Property, Real Estate, Real Estate Asset Management

The future of branded residences in Portugal is looking rosy according to a panel of experts with a deep-dive knowledge of the sector and who addressed the  VII Residential Tourism and Resorts Conference organised by the Portuguese Association of Residential Tourism and Resorts (APR), which took place on November 9 at the Fundação Oriente in Lisbon.

In the day-long conference’s second panel moderated by Eduardo Abreu, Chitra Stern, Co-owner and CEO of the Martinhal Group, which has successfully blended high-end family hotels and Martinhal branded serviced apartments for residential living, with landmark projects in Lisbon (Martinhal Residences) and the Martinhal Quinta do Lago Family Resort in the Algarve, began by painting a glowing picture of why Portugal was a great place to buy a branded residence and that post-Covid there had been an increase in the popularity of owning a branded residence where owners could work from home, or indeed anywhere.

“Portugal is a wonderful place to live and there are more foreigners discovering Portugal. People just love being here, not just because of the weather, but the people are so welcoming and that’s its best secret”, she said.

Chitra Stern said that more and more people knew what branded residences were, the services that are offered, and that this was where Martinhal Residences had placed itself in the market — “It’s a hotel that you live in, and it offers a range of services for hassle-free living with an on-site 24 hour concierge, and a top-quality restaurant service”, said the entrepreneur.

“We are a small Portuguese grown brand and we intend to grow in the branded residences space as a developer and operating partner as well,” she added.

Daniel von Barloewen, Regional Vice President, Accor One Living, a licensor of bands and a manager of residences with 42 operating branded residences and 103 in the pipeline, believes that branded residence will continue to be a growing trend worldwide, including in Portugal.

“We open on average one branded residence every five weeks, one hotel every day (5,500 operating hotels globally) and within the branded residential segment we have 24 of the company’s 43 brands”, he said.

von Barloewen explained that 70% of their projects were classic luxury products. “What we’ve seen in big trends over the past 10 years and the market has accelerated in the last five. There is more growth in towers living, lifestyle, and in premium and mid-scale brands due to the depth of market, with the number of people who can afford a Hilton, Marriott or Swiss Hotel a significantly bigger pool of buyers compared to ultra luxury such as Raffles.

In he case of Portugal, he expected to see stand-alone branded residences in Lisbon, Porto and Cascais, but not in Comporta or the Algarve, meaning residences developed and operated by the same brand, rather than an established hotel or resort brand employing another well-known brand, such as a fashion or luxury car brand as a selling point representing the lifestyle and ethos of that brand.

“A very important point with branded residences is that people are not just buying as a short term investment, but on a mid-term or long-term horizon investment. You don’t buy a branded residence if your goal is getting the highest yield you can, but rather because you are making a commitment on a longer term basis on a property that will hold its value, be maintained, and appreciate over time, and generate a rent-out yield of 3-4% for owners signed up to a rental service,” he said.

Paula Sequeira, Head of Consultancy & Valuation at Savills focused the benefits of branded residences pointing out that the segment had been increasing tremendously, with 700 branded residences schemes world-wide, forecasting an additional 600 schemes by 2030.

In the last 10 years the segment had grown by 160%, mostly driven by hotel brands, but also more non-hotel brands, like designer and fashion brands, drink and beverages, and luxury cars, in the market.

The top three hotel brands were Four Seasons (80%), Ritz-Carlton and St. Regis, both with 122 schemes worldwide. As to non-hotel brands these included Armani, Baccarat and Porsche with new entrants from Dolce & Gabbana, De Grisogono, Mama Shelter, and Rare Finds.

In Portugal, one such branded residence is voco® Formosa Park – Algarve, an example of luxury real estate and prime Algarve property. This development, exclusively sold by QP Savills, boasts a selection of fully furnished luxury apartments in a prime location between Quinta do Lago, and Vale do Lobo, overlooking Ancão Beach.

On the consolidation of the Lisbon and Algarve markets, and Comporta which still does not have a lot of product built, Daniel von Barloewen (Accor) said that Portugal was “well ahead of the game” with “ a lot of potential” while the Algarve has some “success stories on the branded residential front and will “continue to perform extremely well”.

Asked about the strategy for Vilamoura World, a leading luxury residential and tourism resort in the Algarve, with a planned €500 million investment over the next few years, CEO Pedro Reimão explained the plan was to make the resort “even more extraordinary”

“Vilamoura has always been a trailblazer since it was launched back in the 1960s, a unique location covering 2,000 hectares, a diverse development plan encompassing the marina, the surrounding commercial area, hotels and golf courses.”

“What we want to do is consolidate the ownership of the different key assets so that we can revamp and upgrade them, and contribute to the overall positioning of the destination. Our strategy is very simple: improve Vilamoura in terms of the range of experiences it offers, from hospitality, golf courses, and the equestrian centre, to the marina.

“The second step is to make Vilamoura more well known around the world, to attract more affluent people, and the third step of the strategy is to develop the more than 500,000m2 available at Vilamoura World so that people can buy their own piece of Vilamoura in terms of real estate. Branded residences will be one of the options, along with purely residential purchases, as well as hotels, and we have different locations to develop and test different concepts,” he said.