Since taking the reins in Vilamoura last April, master developers Vilamoura World have been quietly endeavouring to secure investment – and the necessary paperwork – to elevate the cosmopolitan resort to a leading European destination. As the first signs of development under their tutelage start to stir, CEO Paul Taylor spoke to The Portugal News about his plans to double Vilamoura’s residential population and the “perfect storm” that he saw in Portugal.
After taking over the resort formerly owned by Lusotur last April, last Friday Paul Taylor unveiled the first project to be launched under Vilamoura World: a €10 million expansion of the L’Orangerie development, L’Orangerie phase II.
“If you go back, phase one is about 10 to 12 years old. It was a very successful golf-course-fronted community. It’s been a centrepiece of Vilamoura for some time because of the golf course. It’s a very famous golf course.
“Phase two is almost a replica”, he explains, adding: “It’s in construction now. We’re investing about €10 million. It pays testament to the fact that we’re investing and starting to develop.”
The progress from paper to bricks being laid is a welcome step for the ‘Master Developers’, who foresee investment of more than one billion euros in Vilamoura over the coming years to achieve their vision, an overhaul that will see some 400 hectares of land developed.
Another “four maybe five projects” are due to start construction towards the end of 2017.
“One of the things that people always ask me when they come here is ‘Where’s the new Vilamoura’? And I have to say, look, first it starts with the paper, and then you get the build. We spend a year doing the work that’s necessary in Portugal to get projects to a point where we can put bricks on the ground.”
The objective, he explains, is that the Vilamoura master plan will create roughly another 5,000 new homes over the next five to seven years, which will double the permanent population of Vilamoura.
Weighing up the company’s progress thus far, he says “I think in 2017 people will see with their eyes; 2016 people are hearing. I think that’s what the process has been like. I think we’re on plan to deliver a leading destination in Europe within five years.”
Paul Taylor believes one of Vilamoura’s biggest pulls, and what makes it so fitting for residential tourism, is its diversity.
“We have diversity across all the socio-economic groups and of course across the demographics, and we’re the only estate that can offer that. And the reason is not just the product, but equally what happens, what life is in Vilamoura.
“We have a marina. We have two beaches and eight beach clubs. We have a new yacht club being developed. We have spas and gymnasiums, clinics and an international school. So people really can live on an inter-generation basis. Everybody here has something to do. No one else can offer McDonalds for the kids and a Michelin-star restaurant at exactly the same time.”
However, with a leading destination title and a doubled population – as well as the traditional peak-season swelling – inevitably comes more traffic.
In due course Paul Taylor would like to see Vilamoura completely pedestrianised, to offer a “much better” guest experience, but until then a number of temporary and more permanent solutions are on the drawing board.
“Traffic is an issue peak season in Vilamoura. So we’re doing two things. This high season we’re putting in a temporary solution which has now been approved by the municipality. And what that does is opens up a lot of our land for free parking so we can take cars from the road and make surplus land for temporary parking to ease congestion during peak seasons. And in addition to that we’ve started to create more one-way traffic around Vilamoura’s inner-ring.”
For 2017, Taylor details, a permanent solution is being drawn up, which involves “allocating a lot of our Vilamoura land outside of the centre, creating very big car parking, and shuttling people into the centre on buses or electric bikes or segways or even electric tuktuks, like those running around Lisbon.
“So what we’re trying to do is create a better guest experience in the centre by using environmentally-friendly, considerate transport.”
And the eco-friendly approach doesn’t stop there: with one of the lowest build densities in the Algarve, at a total of no more than 18 percent across the whole of Vilamoura, Taylor believes “we’re probably the most environmentally considerate destination in the Algarve.”
More good news investment-wise is that the response from core target markets has been solid.
“The Irish and the British are back with a vengeance because the economies have recovered. We have Brexit; it’s an issue, it’s out there, I don’t personally think it’s going to have a big impact either way but it’s an issue out there and let’s see what happens. In addition Germany’s now opening up. We have some Italians coming, Swedish, Danish are coming, and the Dutch are back.”
“A big market for us now is France”, he adds, elaborating: “There’s a big influx of French retirees coming in because of the favourable tax regime and the fiscal benefits you get from that. We’re gearing up for a big influx of French residential buyers and we’re seeing a lot here in Vilamoura.”
Backing that up is news that Faro airport predicts a 164 percent increase in French air traffic during 2016, according to Taylor, along with the opening of a number of new routes into France.
Looking back over Vilamoura World’s first year in business, he reflects “It’s been really hard work; it’s been a much bigger job that I ever imagined because we are sitting in the biggest estate in the Algarve and every day it seems to get bigger.
“It’s been tough. It’s been bureaucratic. We have to deal with governments, municipalities, we have to deal with licences; we need approvals. It can be frustrating at times in certain areas; we have to be very patient. So it’s been tough, but equally we’ve had a lot of wins.”
And while the value of the takeover remains undisclosed, Paul Taylor is happy to explain exactly what he saw in Vilamoura, and in Portugal, to make the bid for it.
“I saw value; I’m an investor, so I have to be honest and say I saw value (…) I also saw Vilamoura in a context of Portugal. Portugal was just about beginning to recover. So I’m looking at a country that had previously recovered from other crises much faster than most countries and that was doing everything it could under Passos Coelho to release itself from the grip of the Troika.”
Having seen the “fire” that Portugal had “to remove itself from that straightjacket”, Taylor also looked at the rest of Europe and the northern European economies, “which had already pretty well recovered”, and along with the traditional demand for the Algarve as a destination, both in terms of tourism and investment, and the security and lifestyle that Portugal offered, “I saw a little bit of a perfect storm in a very positive way.”
He concludes: “I thought these were really good ingredients to invest in a country where the sun shines every day, where the fish is good, the people smile and the wine is the biggest hidden secret that you’ve even known about. It’s an amazing place and if you put all that together it’s what I saw and what I’m seeing manifest itself now in everything we do.”
Between 10 -13 June Vilamoura World will be staging a property weekend showcasing new and existing properties, as well as a fully-equipped show home of the L’Orangerie development. For more, see: http://www.vilamouraworld.com.
BY CARRIE-MARIE BRATLEY, IN ALGARVE, THE PORTUGAL NEWS · 08-06-2016 14:33:00