If the trend is confirmed, this will be further proof of the enormous resilience that the Algarve (mainly it’s tourism sector) has, in recovering from adverse conditions.
This is good news for the Region and for the Country. Algarve is synonymous with tourism.
Activities such as accommodation and catering, real estate, and commerce, together represent around 40% of the gross value added and direct employment in the South of Portugal.
Despite the good news there is also cause for concern with this imminent recovery of the tourism dynamic in the Region. In particular, the negative performance of tourism in recent years has been important in putting on the agenda the issue of diversifying the Algarve’s economic base. Countering seasonality, precarious employment, population settlement or labour force qualification, are priorities assumed by local agents.
Recent studies suggest that the Algarve re- gion needs to invest in the diversification of its economic base, while alternative sectors of activity other than tourism can create more jobs, that ensure high levels of value creation, and contribute to make the Algarve economy more competitive, dynamic, resilient, attractive, and above all sustainable, to face possible fu- ture external shocks, regardless of their nature. Achieving economic cohesion in the Algarve region will be the key to success.
Real Estate Investment should follow this trend, bringing out of the drawer some old ambitions, such as the construction of the Algarve Central University Hospital, the creation of a regional housing strategy, including affordable housing for the middle class and young adults, or the creation of university accommodation for Portuguese and international students, which the University of the Algarve in recent years has attracted through its slogan “Studying where it’s good to live”.
Regarding the potential of the installed capacity at the University of Algarve, it is expected the development of the mobilizing project of the Algarve Biomedical Centre (ABC), a consortium established between the University of Algarve and the Centro Hospitalar Universitário of the Algarve (CHUA), enhancing the development of knowledge in health, well-being and life sciences and its transfer to the market generating sectorial multiplying effects.
The new technologies sector must be developed through the construction of the ICT cluster, using the Algarve Tec Hub, attracting international players, entrepreneurs, investors, and digital nomads.
In parallel, and not in the immediate term, investment in the industrial and technological sectors through the construction of hubs or clusters is also a necessity for the Algarve economy.
In the specific case of Health, the initiative has belonged to the private sector, with the installation of hospitals and clinics, diversifying the offer in terms of specialities and bringing the service closer to the population. A remarkable dynamic is now registered in Senior Living - the modernisation of operating standards in this segment now allows an offer that combines the touristic excellence of the region with the quality of the health services provided.
The lack of beds in this segment is well known - figures widely published, point out the need for 55,000 more beds by 2050, from North to South of the country. In Widerproperty’s ongoing projects, a natural symbiosis has been created between the stakeholders in the value chain, Investors, Developers, Operators, and institutional investors, who buy the project, up and running, with a yield supported by long term contracts. Coordination with the entities that ensure the licensing has also been fundamental to the success of these operations, contributing to a positive response to a growing need. The ageing of the population is a reality.
The Algarve allows us to explore various seg- ments of this market, and to set the sector benchmark, with a differentiated offer, especially in terms of service and amenities that these projects can offer. Some of these projects were licensed more than 15 years ago, when the market was not yet mature enough to receive them, and so they have remained at a standstill until now. What has changed is the entry of experienced operators from other geographies, who find here the potential to implement their brand and expand their offer and their business.
The concepts developed can also adapt or evolve, building a specific offer for each location, from Senior Independent Living, for customers looking for quality of life, with many services and amenities available and no worries, to assisted living, with units specialising in assistance and/or dependency needs, whether physical and/or mental, through specific therapies and equipment and properly trained professionals. The projects developed in a Resort or Community model naturally attract clients from Northern Europe and America (in many cases already living in the Algarve), but also Portuguese clients seduced not only, by the level of service provided, but also by the cultural richness that these communities offer.
2022, is a decisive year for the future of the Region, with the local authorities playing a very relevant role and that through the PRR (Portuguese for Recovery and Resilience Plan) will have a unique opportunity to make it happen. Properly implemented, the programme will complement the structural investments of theregional operational programme, based on the strategic importance of tourism and encouraging the development of the other sectors of activity - the sea, agri-food and healthy eating, cultural and creative industries, renewable en- ergies, health and well-being and transport.