Hotel Assets for Lease in Sabrosa, Portugal

- The asset is a family-owned wine estate (Quinta), which will be bought by us. Have already paid 15% of the total investment amount.
- We have the required funds to pay the remaining 85% of the total investment amount and we will be completing the full payment after we acquire the final property register. The property will be acquired within the next two months. The entire process has been delayed due to the ongoing pandemic.
- The blazoned main house has a built-up area of 1,500-1,800 square meters with a roofed area of 895 square meters. Property has 3 floors with 1 attic. The entire property needs to be refurbished (rehabilitated) before it can be used and the lessee/user of the asset will be responsible for the same. The buildings are ruined or partially ruined, but the stone wall structure is in good condition and other valuable details can (and should be) reused. There is an external area (unroofed) of 732 square meters surrounding the building. The aforementioned property is available to be leased out.
- The entire property is inserted inside a scenic winery with an area of 4.5 hectares that will be owned and used by us (though people can take a walk in the vineyards). Only the building and its surrounding annexes are available to be leased out i. e. 1,500-1,800 square meters of built-up area with 895 square meters of roofed area and surrounding annexes with an area of 732 square meters (unroofed). There is a lot of nature and privacy with scenic views and rich history. It is a great place to (re) build an ancient building as a high-quality boutique hotel or a perfect summer home.
- The yearly lease amount can be diminished in the first two to three years, while the projects and rebuilding/construction takes place. The lease will be a long term one, definition upon negotiation (20 to 30 years). A royalty of 1.5% of the total volume of the yearly billing will be added to the yearly lease amount after the construction ends and the tourism business operation begins, but there won’t be any yearly lease update. The lease is less than 4 euros/square meter/ month. But we are open to negotiate/bargain to a lower value, if we are hired to work on the projects, consultancy, construction supervision, and procurement and/or the royalty paid are higher.
- We take great confidence in the potential growth of the tourism business in the region, that is why we would accept a reduction on the yearly lease if the royalty paid is higher. Unfortunately, we do not have the operational management knowledge needed to run a hotel or the time for it. Our core business is in the agricultural domain, which we pretend to extend and even diversify our portfolio.
- It will be required a security deposit equivalent to 1 year of the lease.
- Since the promoter is an engineer and the family has an engineering enterprise, we can provide assistance, the projects (including Architecture), procurement and construction supervision, as well as all connections with the city hall (and other public offices). We can also assist in the legal aspect of the deal, even with a gold visa (residence authorization), because the promoter's wife is a lawyer. There is the possibility of recurring to EU funds to rehabilitate the old manor and the annexes (to tourism), area in which we have experienced, and that could cover until 60% to 75% of the rehabilitation/refurbishing (including the cost of projects). Being 50% of that value non-returnable (“free”) and the other 50% with low or 0% interest. Making only necessary to have between 25% to 40% of your own capital invested.
- The refurbishing/reconstruction will have an overall maximum expected cost between 1 to 2 million euros, the direct investment can be largely reduced recurring to EU funds. The area available allows having at least 30 to 50 rooms. Great opportunity to invest in a historical wine region, with high tourism potential, and with high-profit margins and return on investment.
- Based on INE (Portuguese Statistical Institute) the average occupancy rate is of 49%, in the area where the asset is located, so in the worst-case scenario, the total business volume would be about 1 to 1,6 million euros (yearly), depending on the total number of rooms and assuming a price of 120 to 180 Euro for the room (in line with what is practised in identical hotels of the region). The estimated/benchmark EBITDA for this kind of business is at least 20%
- Payback period will be greatly decreased and ROI increased if EU funds are used.