While Covid-19 didn’t create the concept of socially distant luxury living, the concept is certainly attracting more attention now in a Post-Corona World.
There are three things today that affluent individuals are looking for when it comes to buying a place in the sun – space, nature and seclusion.
Of course, a home office, a rapid and strong internet connection, stunning views and spacious gardens with pool should also be standard features, as is a good investment return, but health concerns, meaning social distance in the anticipation of future pandemics, have suddenly become paramount.
In a zoom webinar, entitled ‘Why and where to invest in residential real estate in post-Covid-19’, which focused on three different resorts, Porto Montenegro, One&Only Kéa Island (Greece) and Ombria Resort Algarve, the Resident focuses on the latter, a resort under construction in the Algarve’s interior hills.
The 180-hectares Ombria Resort has a construction density of 3.5%. Located about 20-25 minutes from Faro airport and the Algarve’s famous beaches, it is surrounded by nature in a hilly part of the region.
The resort boasts a five-star Viceroy Hotel managed by Viceroy Hotels & Resorts, with an 18-hole golf course, restaurants and other facilities.
Ombria Resort has different types of properties for different clients, including some apartments which are part of the five-star hotel and some turn-key concept new build villas built for each owner. The apartments are for investment and the villas are more for clients who want a purpose-built home.
Really low Covid-19 numbers
Speaking to Financial Times journalist Zoe Dare Hall, João Richard Costa, director of marketing and sales at Ombria Resort, says Portugal, like Montenegro and Greece, has handled the Covid-19 situation well.
“We closed schools and many businesses early on in mid-March and were in lockdown for two months. In the Algarve, there are very few cases,” he says.
Portugal started emerging from lockdown in mid-May and gradually the government has started opening up businesses.
“What we saw, even before the lockdown, were a lot of British and other nationalities coming to the Algarve to spend the confinement in the region,” he says.
João Richard Costa points out that when Portuguese people and foreigners go out to restaurants they are “sticking to the rules”. “The government took the decision that masks were obligatory everywhere in indoor establishments and that is still the case,” he says, but admits that there are some outbreaks in the outskirts of Lisbon and some pockets of contagion near Porto. However, “in the Algarve, we have been spared”.
Flights started a month ago from various destinations, with the first airlines from Luxembourg, Switzerland, Holland and Belgium, with flights now from the UK.
Regarding the British government’s decision not to put Portugal on the safe-destination quarantine-free list of countries, he says: “The Portuguese government is dealing with the situation in the best way possible, stressing the fact that the Algarve still has very few cases.”
Journalist Zoe Dare Hall asked if the virtual viewing of properties has been a useful tool, if it is bringing in buyers and whether the trend will continue post-Covid.
João Richard Costa says that even before the pandemic, “because we are selling properties on plan since they are still under construction, we already had the tools that allowed people to view the properties virtually”.
“Since the lockdown, we worked to improve these tools, to show prospective clients what they can expect from their apartments (i.e. golf course/countryside views), and that certainly helped our sales managers interact with potential buyers,” he explains.
While in March the marketing and sales team saw a reduction in the number of potential buyers, from mid-April they started to see a lot more interest, with a huge increase at the end of April and through May, which was almost a “normal month” in terms of enquires, despite all viewings being conducted virtually.
“We were also happy to complete some sales during lockdown, mostly clients that had reserved properties before the lockdown, but also some new clients. We have even made sales to clients who haven’t even physically visited the properties but were happy to move forward on the basis of the virtual tours and videos we produced,” he adds.
All about the space and nature
When it comes to selecting a luxury property, are secluded and unspoilt open spaces inland, away from the crowds, more appealing now in a post-pandemic world?
“Here at Ombria, because we are in the interior of the Algarve, our experience is that people are clearly reassessing their priorities and values. Prospective buyers say they want to live in an area surrounded by more greenery, with a connection to nature, somewhere that they feel is healthy and safe for their families,” says João Richard Costa.
“We are lucky to live in areas which have a low population density, as have our resorts, and we see a lot of people looking for these types of developments. We offer villas with separate spaces to work in, that have good internet connection and outdoor areas,” he explains.
Golden Visa schemes
In Portugal, government investment programmes like the Golden Visa and Non-Habitual Resident schemes have been invaluable for enticing overseas residents to investing in and moving to Portugal, yet these have not been the main factor for those looking for an investment in Algarve resorts such as Ombria.
“These schemes are an added bonus, but they are not the main drivers for people seeking to buy a property in which to live here in the Algarve,” says João Richard Costa.
“About 10-20% of our buyers do so to get the Golden Visa, mainly clients from the Far East, Middle East, South Africa and Brazil, and that’s because we do have apartments for sale at around the €500,000 mark, which is the investment required to get the visa, while the properties can also offer a 5% return per annum.
“But we are also getting more and more buyers interested in the Non-Habitual Resident scheme because they benefit from generous tax incentives when moving to Portugal,” he adds.
João Richard Costa says there are many people who want to have their first residence in the Algarve, and a second residence in the main city where they come from. “We are seeing a shift in the way people do business, from having their first residence in the main city to now wanting it in a rural area.”
When it comes to buying a property that takes a significant investment, the buyer needs to feel he or she is dealing with a trusted brand with a long track record in that and other international markets, and the reassurance that the brand will still probably be there in years to come.
Owned by a family office based in Helsinki that is focused on long-term real estate investments in different countries, the Ombria resort will be developed over 10 years in three phases, with the company currently developing the first phase. Each phase will take around three to four years to complete.
João Richard Costa says the investor is in Portugal for the long term, with the first phase currently underway being the five-star hotel, the golf course, restaurants and other facilities, and the next two phases being properties of different types.
Another key concern for buyers is their ability to rent out the properties when not in use. This flexibility of use seems even more important now in the light of possible future lockdowns and pandemics.
“We can offer a lot of flexibility to buyers depending on what they buy, and with three different options to choose from.”
The least flexible option is where clients have to rent out through the resort and can use the property for up to 17 days per year. In return, they get a guaranteed rental income. When they use the property, they don’t pay anything and enjoy all the benefits of owning a property integrated into a five-star apartment resort, with use of the hotel facilities and its services.
The second option, involving two- and three-bedroom townhouses and small detached villas, is for people who want to spend as much time as they wish, and can rent the property out, or not. If they want to rent it out, they will have to do so through Viceroy Hotels & Resorts.
The third option is the most flexible. The larger bespoke villas can be rented out by the owners as AirBnB, or by the company through a rental contract.
Ombria is in an area that people don’t usually see in the tourist brochures. It’s a hilly and natural area with lots of trees, green all year round, and with two streams crossing the resort. The properties are all nestled in the hills and phase 1 will be ready by 2022.
By CHRIS GRAEME