Exclusive on ECO Sapo: Mercan directs 1,200 million euros of golden visas to 31 hotels in Portugal

Source: ECO SAPO

Portimão, Faro, Funchal, Santo André and downtown Lisbon are the next destinations for Mercan Properties, which in 2015 began a path that will take 1,200 million euros of golden visas to the hotel industry. The Mercan Properties group, which arrived in Portugal in 2015 to take advantage of the business opportunity provided by the Residence Permit for Investment Activity (ARI) regime, is preparing to grow from the current 12 to 31 hotels in the country before the end of the decade. This size, today, would put Canadians just one unit away from the Vila Galé Group, the third largest hotelier operating in Portugal.

The investment via ARI, which began in Portugal in 2012, the year after the signing of the financial assistance program with the troika, allowed Canadians to develop the overwhelming majority of 31 hotels under the golden visa regime for rehabilitation. In addition to these 28 hotels, which include open units, others under construction and some still in project, there are three others with a project developed based on the investment modality that Mercan Properties is currently promoting, in response to the legal change in the ARI rules.

This ongoing model is that of investment in hospitality, which includes the Mercan Private Equity Fund I, of 140 million euros, already belonging to the new generation of ARI investment, focused on hospitality. To make its strategy viable, Mercan Properties, the manager of the hotel units, entrusted the management of the fund to a third party, duly registered with the CMVM, points out the director-general.

The "hospitality" regime presupposes the application of a capital of 500 thousand euros in investment units. In the previous legal regime, among the variety of options for applying for a golden visa, Mercan Properties opted for urban rehabilitation, which required an individual investment of 350 thousand euros in areas of high urban density and 280 thousand euros in low-density territories. To manage the hotels, the Canadians established a specific team, recruiting professionals with experience in hospitality, some of whom have been linked to this industry for decades. 

Exclusive interview with Miguel Gomes, Managing Director of C&D Department

Of the 31 hotels on the Mercan Properties hotel list, 12 are already in operation, under brands of the Hilton, Marriott, Wyndham and IHG groups, spread across the Algarve, Alentejo and the two banks of the Douro in Porto. In the openings held in 2024 alone, 70 million euros were invested, with which 338 rooms were created and 164 jobs were created, the general manager in Portugal of Mercan Properties, Miguel Gomes, tells ECO.

"The Canadian Mercan Group is an emigration management company. The entry into Portugal is due to the fact that at the time Mercan identified the country as great for attracting investment and capitalizing on this investment in hotel projects", he explains. "Mercan had already developed a similar model in the US in the past, but in which it was not the majority investor in the units where it raised the investment. Portugal is the first country where it invested in the entirety of each project and was the promoter of each of the projects", continues the head of the Canadian group.

"The investment model we operate in Portugal was innovative because it was the first country where we attracted investment and directed it to projects developed by Mercan itself. We have raised investment in full for each of these projects", highlights Miguel Gomes. The current direction towards the hotel industry is currently taking the capital of citizens with nationality from countries outside the Schengen area to the three new hotels in Gaia and Portimão.

In Gaia, Riverview will be a four-star Marriott with 75 rooms. In the city of Barlavento, the Alvor Beach Hotel, with a Hilton brand, five stars and 193 rooms, will appear, and, in Praia do Vau, the Hard Rock. Developed in phases, this will have one part of investors under the previous ARI regime and the other in "hospitality".

Miguel Gomes answers the question regarding the controversy raised in Portimão by this large development 200 meters from the beach (in the online information, the company promotes the Ponte do Vau Beach Hotel as being "a few meters from the beach") with the current characteristic of the land, abandoned and with open-air excavations that flood in rainy weather, constituting a potential danger to the population, points out the manager. The intervention at Hard Rock will include the rehabilitation of an abandoned building of an old residential to create a Beach Club.

Lagos Marina Project Hilton Gardenn Inn Lagos & Curio Collection 

This hotel will mean an investment of more than 200 million euros and the sum of about 450 apartments and hotel rooms. "We expect to conclude in 2026", explains the head of Mercan Properties. When asked about the type of investor from outside the Schengen area who comes to Portugal to seek investments in the hotel industry, the managing director of Mercan Properties points out "investors who are looking for this residence permit and who have a very diversified profile, both in origin and social stratum, but identify in Portugal an opportunity to acquire a potential new way of life".

Among the more than 80 nationalities, China, the USA and the Middle East predominate. From this last geography, the "CEO of a large American company, who lives in Dubai, emerged with Mercan Properties. I had the opportunity to talk to him, we addressed the topic of why the golden visa in Portugal and he explained thathe is very pleased to live in Dubai, but he has two teenage children and wants to give a different perspective on life to his children. Therefore, he made this investment in Portugal, which allowed him to have a residence permit, and his children are already studying here in Portugal. This is the example of a typical golden visa investor, or ARI, in Portugal and in Mercan products", he assures.

The third largest hotel group in Portugal and close to the second

Mercan Properties has a dozen more hotels under construction. One of the new locations is the municipality of Santiago do Cacém, where a beachfront Hilton Tapestry is under construction in Vila Nova de Santo André. Also to be built, but in Alfragide, is Marriott's Moxy, a three-star unit with 218 rooms. One of the geographical particularities of Mercan Properties' choices is its presence near the largest air gateways in the country. Next to Humberto Delgado Airport will be a four-star Double Tree (Hilton group brand) with 230 rooms.

In another capital, the Algarve, Hotel Indigo (IHG group) will add 135 four-star rated rooms to Faro.

The investment of more than one billion euros through ARI will be applied, in the coming years, to also strengthen in Funchal, where a four-star Marriott will appear. This same almost century-old North American hotel group and Mercan Properties also plan to arrive together in Bairro Alto, with a five-star unit, and Avenida 24 de Julho, next to Cais do Sodré, two of the ten hotels still in the development and licensing phase. Further south, in Lagos, the company managed in Portugal by Miguel Gomes has just laid the first stone of the Lagos Marina Hotel project.

To build this imposing hotel portfolio in less than a decade and a half, the Canadians, who arrived in Portugal only in 2015, knew how to take advantage of the possibilities offered by the golden visas and thus increase the hotel supply in a country where tourism represents about 13% of GDP, having been worth half of the growth recorded in 2023.

From the investment made by citizens applying for ARI in rehabilitation projects, hotels such as the Casa da Companhia Hotel, in Rua das Flores, have already been born, in a building about three centuries old that once belonged to Real Companhia Velha. In this unit in Porto, 11.2 million euros were invested by 32 investors. Also in "Invicta", Fontinha Porto, Trademark Collection by Wyndham brought together 40 investors, who invested 14 million euros there. Half of this amount, in Amarante, gave rise to Casa das Lérias, the only one of the 31 Mercan hotels that is not operated under an international banner.

Also to the north, Mercan Properties is present with two Hilton and a Marriott (through the Renaissance brand, a hotel that is in the expansion phase) in Porto, and a Sheraton in Matosinhos, for a total of almost 120 million euros and more than 330 investors.

On the left bank of the Douro, the Riverview Hotel is under construction.

In addition to Amarante, the focus on the interior has already taken Mercan Properties to two major cities in Alentejo. In Évora it has two hotels, the most recent of which is the Holiday Inn Express, in an investment of 16.8 million euros inaugurated at the end of October.  "The strategy involves diversified geographical dispersion, because the country is not just Porto, Lisbon and the Algarve. There are other locations with a lot of tourist potential", explains Miguel Gomes, when asked about the rationale of these cities in the interior of Alentejo for the establishment of major international brands.

"The operating accounts are not worse because we are in Évora. Évora captures a lot of tourism, has a slightly shorter average stay, but it has its attractions". Beja has a different logic, he explains. "We entered Beja because this opportunity arose for us, we believed in the project, we made our projections and [we considered that] Beja has potential. Also because to date there was no hotel offer with the quality of an international brand". Opened in mid-August, this unit reached 45% occupancy at the end of October and its restaurant is already attracting those who pass through the city, even without being guests, says Mercan Properties.

"Our idea is that the tourist who spends a week in Porto, spends one or two weeks in the Douro, Amarante, or relatively close. The same in Lisbon. I would say that half of the international tourists who visit Évora are spending some season in the Algarve or Lisbon and complement it with two or three days", says the head of the Canadian group in Portugal.

Further south, Albufeira and Lagos are part of an expansion to seven hotels in the Algarve. Two Hilton, 4 and 5 stars, and a Marriott in Lagos, two hotels in Portimão, one of which is the first Hard Rock in the country, the unit in Faro with IHG's Indigo brand, and the existing Hotel California Urban Beach, in Albufeira.

California Urban Beach was, explains Miguel Gomes, "a novelty in the performance in Portugal. We incorporated a hotel in operation, which we acquired at the beginning of the year. The California was developed solely by Mercan, but we expect it to be incorporated into a future investment vehicle, such as the one that Mercan has in place at the moment", details the general director to ECO. "The portfolio, between open hotels and those in the pipeline, is 31 hotels, 3430 rooms, 1,200 million euros of investment", he describes, stating that he is "looking for new projects and investment opportunities".

In perspective, it should be noted that the second largest hotel group in the country, Vila Galé, has 32 hotels on the mainland and islands — although with expansion plans, such as the hotel announced this month for Golegã. Accor, owner of brands such as Ibis, has 38 hotels. Still very far from the Canadians, the Pestana group, with more than 70 units in the country, a number that includes the Pousadas de Portugal network.

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