Algarve investment – why golf resorts are fighting back as residential hotspots

29 April 2021 | Investment

Two resorts aiming to achieve this are Amendoeira and Palmares, two developments in the hands of Spanish developer Kronos Homes.

Here, in this two-part special, PIT explores what they are offering and what investment in Portugal is looking like post-Brexit and during the ongoing Covid crisis.

Honesty is the best policy

PIT was kindly invited along by Kronos Homes to see both developments in the same day. Amendoeira sits inland, but only around a ten-minute drive from the beach and 30 or so minutes from Faro International Airport.

The resort has been around since the mid-2000s, but – like many others – was badly hit by the 2008-9 global financial crisis. Kronos took over many of the homes at Amendoeira in 2018 from previous owner the Ocêanico Group as part of a €200 million investment in the Algarve. It also took on Palmares resort in Lagos at the same time, as well as committing to investment in Lisbon and elsewhere in the country.

It was Kronos’ first venture in Portugal as it saw the potential for both reviving Amendoeira and creating something special from scratch at Palmares.

Alda Filipe, sales and marketing director at Kronos Homes, says clients increasingly know exactly what they want and argues that it pays to be honest with them from the start.

Filipe, a passionate and straight-talking host, has 20 years of experience in the Algarve – most of that spent in the Golden Triangle and Vale do Lobo, in particular – and says things have changed now.

“Clients have seen everything. They are very knowledgeable,” she says. “It’s our job, as the developer and investor, to tell them why they should be careful with this or that, to ensure they get what they want. If they want ocean-views and beach access, for example, Amendoeira won’t be for them. I could say to them Amendoeira has ocean views, because you can just about make it out on the horizon, but it wouldn’t be true.”

She says the main attraction of Amendoeira – and all Kronos’ developments – is the quality architecture and purity of the design.

With Amendoeira, Kronos took on existing homes and has set about refurbishing and restoring them, as well as building a new and modern clubhouse during the pandemic. The clubhouse was due to start construction in March last year, just as the first Covid wave hit Europe. Sticking to precautions and regulations, the team decided to go ahead with the build and the refurbishment of properties to show people and investors it was still open for business, even with the challenges posed.

What is on offer?

Reaching more than 270 hectares in size, the resort is huge and well-landscaped. It’s situated a short distance from Silves – the historic former capital of the Algarve region, famous for its Moorish castle – and also close by to Portimao, a gritty Portuguese fishing town famous for its sardines. Guia, best known for its chicken piri-piri restaurants and being the home of Zoomarine, a family-friendly theme park, is nearby as well.

The resort is a mixture of apartments and villas set in landscaped gardens, and also includes the award-winning Faldo Course, designed by British golfing great Sir Nick Faldo, and the challenging O’Connor Jnr. Course, the only illuminated nine-hole golf course in Portugal, allowing players to take to the fairways day and night.

Additionally, there are number of potential scenic paths for jogging and cycling, a FIFA standard natural grass football field, two AstroTurf five-a-side football fields, six tennis courts and two communal swimming pools, along with gym facilities and the on-site golf, for which owners have a 40% discount.

Owners also benefit from 24-hour security, a 16-hour reception service, and maid and laundry services to help support an ‘easy and contemporary life’.

Homes at Amendoeira Golf Resort are available for buyers both looking to live on-site permanently or semi-permanently, while a full rental and management service is available for those who prefer a purely investment vehicle.

Available properties (which come fully furnished and equipped) include: two-bedroom apartments starting from €285,000, ‘2 + 1 bed’ duplex apartments from €330,000, a three-bed villa with pool from €540,000 and a four-bed superior villa with pool starting from €1.2 million.

This is much better value than the Golden Triangle and Filipe says you couldn’t build these homes now with such low values. She believes the low-density nature of the resort, the security offered by both the resort and Portugal in general and the high quality of construction are behind the success of sales so far.

Good as new

After an excellent (but slightly too filling) breakfast at the revamped clubhouse, we are taken on a tour of the grounds, the apartments and the villas by amiable sales consultant Ron Haslam. He’s been based in the Algarve for 35 years but has still kept his Scouse accent and love of Everton FC. 

According to Haslam, the two-bed apartments are the best choice for investors because of their appeal to golfing groups, but equally the villas – which have direct views of the golf course but don’t feel on top of it – offer much better value for money than villas in the Golden Triangle and other prime parts of the Algarve.

Despite in many cases being 11 or 12 years old, the apartments and villas feel almost as good as new and have been nicely furnished. The distinctive red sandstone design – which gives off a very Moorish vibe – can put some people off at first with its starkness, but it does help the homes integrate into the local surroundings.

Owners can make changes to the interiors of the properties as they see fit, but must get condominium permission for any changes to external areas such as the rooftops and balconies.

The area is certainly very tranquil – with views overlooking the golf course and a large orange grove – but will be more suited to those looking to get away from things rather than those looking for a real sense of buzz.

There is a Spanish-style bar on site and a number of the Algarve’s major cities are close by for those who want more nightlife. During more normal times, a shuttle bus runs from the resort to the beach, and will also take people to wherever they need to go on site.

How have Covid and Brexit affected the landscape?

Filipe says that, rather than affecting sales, the twin challenges of Covid and Brexit have actually helped to cement buyer interest. More investors, rather than just wanting a second home to rent out and generate returns, now want something more. They want somewhere they can live permanently or spend more time, somewhere with lots of space and gardens.

While apartments tend to be the best investment asset, this did change somewhat last year as people sought more space. With many Portuguese holidaying domestically, they wanted a place with a pool and the chance to work remotely. This trend is likely to continue, with the possibility of further waves and lockdowns.

“When Covid started, we thought that we might start losing sales. But we soon found people saying: ‘I want to be there; I want to invest’. We had 15 sales in the quietest time of the year. People are now being more decisive because of the situation. Everything is going well on sales.”

As it counts as a touristic complex, Amendoeira will be free from the Golden Visa changes that are expected to exclude many properties in the Golden Triangle and elsewhere in the Algarve from the scheme from January 2022.

“The Golden Visa is not the main reason people invest here or in Palmares, but that could change from January 2022 when Brits might see it as the easiest way to access the EU,” Filipe explains.    

Amendoeira has seen an 80% year-on-year rise in villa-type sales, with the resort’s three and four-bedroom villas with private pools attracting particular interest ‘as families buy into the resort lifestyle’. UK and Irish buyers are still key, but not as much as they once were, with buyers also hailing from France, Sweden, Canada, the US, Netherlands, India, China and Germany, creating a multicultural community of owners.

Under the Portuguese government’s plans to ease lockdown in a phased way, golf courses were permitted to open again on April 5, and the team at Amendoeira has since been welcoming families back and showing off its brand-new facilities.

The resort, having undergone an extensive redevelopment during the pandemic, says it is focused on providing a ‘luxurious and healthy experience for the whole family to enjoy’.

“We have taken a whole-family approach during the refurbishment of Amendoeira, so that the facilities appeal to our guests and homeowners of all ages. We have such a wealth of natural beauty all around us at the resort that it’s been wonderful to improve the existing facilities in a way that fits with that environment,” Filipe concludes.

*Part 2 will focus on the work being done to create a new destination at Palmares

<!– LinkedIn –> This post has originally been featured in Property Investor Today.