Savills Investment Management surpasses €200M AUM in Portugal after buying Palmela and Sobral palaces in Chiado to create a five‑star hotel with residences.
Savills Investment Management (Savills IM) has exceeded €200 million in assets under management in Portugal after acquiring two landmark palaces in Lisbon’s central Chiado district. The Palmela and Sobral palaces, a combined asset of more than 24,000 square meters at Largo do Chalariz, 30, will be repositioned as a five‑star hotel offering both hotel rooms and branded residences.
Savills IM will act as asset manager on behalf of the property’s new owner, Arab Bank (Switzerland) Ltd., while Quest Capital Partners has been appointed development manager for the conversion project. The two palaces are linked by a cantilevered gallery, include three outdoor courtyards and offer exceptional rooftop views over the Tagus River and the city — features the managers say will be central to the luxury repositioning.
Both buildings underwent rehabilitation in 1997 that preserved their monumental facades, an advantage that the team expects will ease future interventions while protecting the historic character of the site. The project blends heritage conservation with a hospitality-driven repositioning aimed at capturing sustained tourist demand for high-end stays and city residences.
“This transaction demonstrates our strategic commitment to Portugal, a market of great potential that attracts visitors from all over the world for its lifestyle, favorable climate and renowned gastronomy,” Savills IM said, highlighting the country’s strong and sustained demand as a driver of attractive repositioning opportunities.
The acquisition reinforces a broader Savills IM strategy in Portugal. In recent years the manager has added supermarkets to its local portfolio, including two supermarkets in Vila Verde (Braga) and Montemor‑o‑Novo (Évora) — with long‑term leases to the Continente chain — and, at the end of 2024, four additional Continente‑leased supermarkets in Lourel, Leça do Balio, Loulé and Mafra on behalf of its EFRF fund.
Market observers say the move underscores investor confidence in Portugal’s tourism and retail fundamentals. By combining prime heritage assets with a hospitality and branded-residence model, Savills IM is positioning itself to benefit from both short‑term tourist flows and longer‑term residential demand in one of Europe’s most visited capitals.
Implications:
• For Lisbon: upgraded luxury hotel and residences in Chiado will likely boost high-end hospitality capacity and local tourism appeal.
• For Savills IM: crossing the €200m AUM mark strengthens its footprint in Portugal and signals continued capital deployment in both retail and hospitality sectors.
• For investors: the deal highlights opportunities in heritage-led repositioning projects where preserved façades and exceptional location can drive value creation.
