Vilamoura was already extraordinary and it is going to get even more extraordinary
The Arrow group is relaunching Vilamoura as a tourist destination. The CEO of Vilamoura World, Pedro Reimão, details the plans which include expanding the marina and building new residential areas.
The Arrow group has announced a new positioning for Vilamoura. What does this positioning mean?
Vilamoura was already extraordinary and will become even more so. As well as having the part of Vilamoura that was already acquired by the Arrow group – the part of Lusotur and the Vilamoura marina, which are the historic companies associated with the development of Vilamoura – now with the acquisition of the Dom Pedro hotels and the Dom Pedro golf courses, it’s clear that what we want to do is recompose the old perimeter of Vilamoura a little in order to be able to act on the different aspects of what the Vilamoura experience is for our visitors and for our owners.
These are transformations that are already taking place…
They are steps that we are going to continue to take in order to do something relatively simple, but difficult to do: transform Vilamoura into the most extraordinary experience possible by acting on the various aspects of that experience and that includes everything from the more glamorous and urban aspect of Vilamoura near the Marina, with the restaurants, the stores, the nightlife and also the services, such as the banks, almost like a city. But also the more resort or vacation side, which has to do with the golf courses, the idyllic landscapes, the environmental park with 10 kilometers of trails for cycling and walking and watching the birds migrate. In a way, we want to manage this multiplicity of experiences, from golf to the beach, including restaurants, life and sports, in order to attract more and more people. We want to leave them absolutely dazzled by their visit and, of course, ultimately turn them from visitors into owners, to the extent that they buy our real estate from us.
And when will the transformation be complete?
It’s all happening very quickly. The acquisition of Vilamoura by the current shareholders was about two years ago. The Dom Pedro acquisition has now taken place. There will be a number of other acquisitions that will be announced soon. All of this is recent and, if it means anything, it’s an acceleration in the pace at which we can count on this news. Then there will be important coordination and integration work. We have to do some work with some of the partners who already operate in the area and make them aware of how much is already available to do in Vilamoura. But also our own investment in new facilities and new services or in the renovation of existing services, whether in the golf courses, hotels or in the forthcoming acquisitions that we will be making.
But are there any new projects planned?
There is, of course, the work of developing new real estate projects from scratch. At the moment, we have three real estate projects on the market that are already under construction: Vilamoura Parque, which is the closest to the marina and the most urban. The Nine, which is a more remote building close to the golf courses. And then Natura Village, which is closer to the environmental park and in an area with more bucolic landscapes. We have a pipeline of around six new projects to launch in the next six months. In practice, the effort is to coordinate what already exists in order to give them visibility and projection, to renovate or upgrade our facilities and our current businesses, including golf and hotels. And then there’s the construction of new real estate projects, including the three we’re already building and the six we’re about to launch, as well as new amenities. We really want to develop the sports offer available in Vilamoura. We’re thinking about the location and configuration of the new sports center that will not only serve visitors, but also buyers of our properties, as well as teams and events that may take place there.
You mentioned that there will be new acquisitions. At this stage, what can you say?
Nothing at all. But we’ll soon have news that includes other assets in Vilamoura and beyond.
How much investment has already been channeled and how much is still planned?
What has already been invested in the acquisitions and investments already made in the projects that are already underway is more than 400 million euros, which is obviously a lot. But to give us an idea of the level of ambition we have, not only in new acquisitions, but also in investments in renovation and the launch of new projects, we’re talking about figures that will exceed 500 million euros. Even more than we’ve already spent. If we think that what we’ve already spent includes the acquisition of the marina, the acquisition of the Vilamoura land bank, the Dom Pedro Hotels and the golf courses, it’s a sign that we’re really going to invest a lot in upgrading these assets, in some more acquisitions and in launching new projects.
They want Vilamoura to position itself even more in Europe as a preferred destination. What nationalities are you working for?
Not just in Europe. But I’d start with the most important one, which is the Portuguese market. Vilamoura, unlike other locations, has always had, and if it depends on us it will always have, a significant weight of Portuguese buyers and visitors. Our intention is for this to continue. What we want is to add more and more other source markets. After the Portuguese come the usual suspects, including the UK, Ireland and the other northern European source markets. This also includes the growing opportunity to capture markets such as the United States, Canada and Brazil, which will also be important.
They also intend to increase the number of units sold…
Along with this successive launch of real estate projects, there has been a huge increase in the level of ambition, in terms of the number of units we want to sell. In the past we sold less than 30 units a year. This year we’re already going to sell around 100. Our intention is for this number to grow successively and for us to be selling around 200 units a year by next year. There’s a huge ambition here, which is already anchored in the results we’re achieving this year, but which we want to grow in the future. With this in mind, we’re going to have to work very hard to continue attracting Portuguese buyers, but also buyers from our usual destinations and, as far as possible, from growing destinations such as the United States, Canada and others that are emerging.
Will you have to diversify your offer?
In order to sustain this significant growth in the number of projects we have on the market, we are fully aware that we are going to need to have very diversified offers. What we’re going to do is play with the variables we have, in terms of the configuration of the projects, the size of the units, more central locations and others that are more remote, in order to be able to cover a more diverse range of buyers. We will continue to have offers in line with what we have had in the past, but at the same time we will also want to have higher quality offers to accompany the general increase in quality that we want for the destination.
Will there be an upgrade in the types you offer?
Yes, which has to do with the nature of the projects. We have a project in a fantastic location surrounded by golf courses and bordering an environmental park, where the whole project is low density and the units are reasonable in size. These will obviously have high prices because of these unique circumstances. They will be villas and semi-detached houses. But at the same time we’re going to have some projects in areas that are a little more inland, they’re going to be buildings and we’re betting on smaller units to reduce the price. We’ll always have great diversity. What we’re going to try to do is ensure that this diversified mix also includes increasingly premium offers in terms of the quality of the design of the projects, the materials and the experiences themselves.
What price range can you think of?
At the moment we are selling units ranging from around 600,000 euros to 1.2 million euros in these three projects that we already have on the market. What I would say is that not only will the lower range go down, as we’re going to have smaller units, in more inland locations, which are configured to allow us to sell units at around 400,000 euros each. As we’re going to have projects in more exclusive areas, where we’re going to invest in more isolated villas with their own land, the prices will probably reach and even exceed the two million barrier.
When is the return expected?
The investment is ongoing.
Looking at the tourism sector, what remains to be decided to help boost Vilamoura even further?
Regardless of the current circumstances, the fact is that tourism is a very important and healthy sector of our economy. But we all realize that we could boost tourism even more if we had more airport capacity in Lisbon, just as in the Algarve we really need to diversify direct flights to new destinations, particularly to the United States, which is one of the growing opportunities for us here in the Algarve.
Do we need a new airport for that?
It would be good if we could quickly reach decisions and build the new Lisbon airport, as well as actively strengthening and diversifying the routes at existing airports, particularly Faro, because this would allow us to boost the sector’s performance even further and contribute to the development of the economy and Portugal. One of the things we sometimes forget when we talk about tourism and real estate is to talk about the juxtaposition of these two concepts, which is tourist real estate. Tourist real estate is a fantastic opportunity for Portugal because it not only creates value through foreign direct investment in the acquisition of houses and properties, and then these people boost the hotel business by renting out their homes, but also because they themselves come and spend extended stays with us and generate immeasurable wealth that is sometimes underestimated.
How do you anticipate the future of Vilamoura?
We are returning to the original dream of Vilamoura, where it was a single property that was then broken up. We are building up this portfolio to ensure that we will never be the full owners of Vilamoura, nor do we intend to be. But we have the levers, under our management, to contribute to this elevation of Vilamoura’s position and to ensure that it continues to be extraordinary and becomes even more so. We have more than 500,000 square meters of land bank to build on.
