Vilamoura “back up for sale” – this time in pieces

After all the fine words about a “billion euro investment plan” that would “strengthen and revive” Vilamoura – making it “Europe’s leading resort” with as many as 10,000 homes, five new luxury hotels and 18 separate construction projects – American owners Lone Star have revealed they will be selling the complex off piecemeal.

With the help of property consultancy CBRE – also trying to find buyers for the Algarve’s last chunk of prime coastal real estate further west at Praia Grande (Silves) – Lone Star is reported to be offloading the iconic Vilamoura Marina, “among other assets for sale”.

It’s not the first time the US equity fund has “purchased in Portugal for onward sale”, reports jornaldenegoçios this morning – and this is relevant in the context that the disparagingly-dubbed ‘vulture fund’ is negotiating to buy Novo Banco, the ‘good’ bank that rose from the ashes of the collapsed Espírito Santo empire at ongoing massive cost to the country’s taxpayers.

Critics of the terms of the Novo Banco sale have constantly referred to the insecurities that may lie ahead.

As Observador remarked earlier this year: “Typically, after investment, private equity funds tend to force restructuring operations with the objective of capitalising on the investment, which very often means dividing up assets”.

This happened when Lone Star scooped the run-down Dolce Vita chain of supermarkets for a song in August 2015 (selling them off for vast profits only months later), and it looks like happening again in Vilamoura.

Says negociosonline that while neither Vilamoura World – the company running the resort – nor Lone Star “want to comment” about the sale, it is understood that investors are already on the horizon.

The financial website says “one is represented by Aguirre Newman” – a leading Spanish property consultancy.

As to the nitty gritty of prices, we are kept suitably in the dark.

Lone Star purchased Vilamoura for what in the trade was a “bargain-basement price”, three times less than the value set on the resort pre-financial crisis.

Nonetheless, it was still €200 million which it may now be seeking to make back with the sale of the swanky 825-berth Vilamoura Marina.

One part of the resort that the fund is reported to be ‘holding onto’ however is the ambitious Vilamoura Lakes project – the former Cidade Lacustre that won Project of National Interest status in the ‘good old days’ when the resort was still in Portuguese hands.

Whether Vilamoura Lakes will be the subject of a sale presentation in the near future is for now unclear.

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