Grupo Pestana completes the purchase of Madeira Palácio for €45M

Grupo Pestana completes the purchase of Madeira Palácio for €45M

The Pestana Group is officially the new owner of the Hotel Madeira Palácio. The purchase was closed last Friday with Millenium BCP for around 45 million euros.

The information was confirmed by José Theotónio, CEO of the group, to Eco, according to which the asset will be transformed into a housing block with apartments and a new hotel, which will appear next to Pestana Bay.

The Hotel Madeira Palácio was put up for sale by the bank at the end of last year. In April of this year, the Pestana Group stated that it was following the due diligence phase with BCP, stating that "we made a proposal, they (BCP) made a counterproposal and we accepted". The deal ended up closing for the 45 million euros that were under negotiation.

José Theotónio explains that the housing part is ready, and is going to the market. The old hotel will be transformed into apartments, also for sale: «we are going to start selling the real estate fractions and making the project to convert the old hotel into a residential».

According to the official, a third component of the project involves building a new Pestana hotel next to Pestana Bay, built on the land that is part of this lot.

The asset also includes a lot with housing under a colony regime, a regime that «only exists in Madeira. The houses are inhabited and the settlers have preemptive rights. If they exercise this right, they can buy them and pay directly to the bank», explained José Theotónio in April.

The Hotel Madeira Palácio was bought in 2018 by the Enotel Group for 40 million euros, which proposed to increase the project to 318 accommodation units and 728 beds. The works started that year, and forecasts pointed to its completion last summer, but, according to Jornal da Madeira, the project was eventually abandoned after BCP rejected the conditions proposed by the Enotel Group. However, it returned to the market in 2020.

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