

Santander is lending up to €600m, or 100% of the construction cost, to Lone Star and Vilamoura World’s €1bn joint venture in Portugal, Real Estate Capital can reveal.
The Spanish bank will provide development facilities on a project-by-project basis as the 1,700-hectare Vilamoura leisure scheme in the southern Algarve region is built out in phases over the next five years.


Lone Star and Vilamoura World are currently marketing development opportunities at the site to investors around the world. The total site will eventually house 10,000 residents and will include a lake, an 825-berth marina and five 18-hole golf courses.
Lone Star acquired Vilamoura’s developers, Garvecat, from Spanish bank Catalunya in April this year for €200m as part of the bank’s divestment programme. Catalunya paid €360m for Vilamoura in 2004
“The purchase of the land has been equity funded and Santander is prepared to loan 100% of the construction cost which is 60% of the estimated €1bn gross development value,” said Vilamoura World chief executive Paul Taylor.
“Investors can then get down to the nitty gritty about whether Portugal and Vilamoura tick the box for them, what it will cost to get involved, and what they can sell at.”
Santander will lead the initial financing but other banks may join the funding at a later stage, said Taylor.
Vilamoura World announced this week its masterplan for the 400 hectares of land available for development. Eighteen project sites providing a mixture of residential, leisure, tourism and retail uses are available in sizes ranging between 1.5-168 hectares.