New Business Opportunity for Property Developer


Address :

Tazacorte - La Palma Island, Canry Islands,
Buerto Nao SPAIN
Selling price : 6 830 800 €
Charges : Consult us
Fees : Consult us

Description :

Land space : 49 m²


Owner sells new plot of land of 49,700 sqm, (12,08 acres), with new license and planning permission to build a Aparthotel of 500 beds. The plot is located in La Palma Island, (a Biosphere Reserve), Canary Islands, Spain, with wonderful panoramic views over the ocean and is free of any charges, debt, mortgage or taxes.

The owner will consider entering in a joint venture with investor to develop this new plot of land. The expected return on investment and projected profit, ROI, is over €13.3 million in less than 3 years before taxes, as the business analysis indicates. The approval, permits and authorization of public administrations required for project implementation to proceed in this plot of land is already in place; therefore construction can start immediately.

This plot of land is max. 45 minutes from the new international airport. The owner already has got letters of intent from 3 different European tour operators interested in asset purchase, management or joint venture agreements in this project with the property developer.

The characteristics of the planning permission for this plot would allows the property developer to sell the Aparthotel in individual units, (self-contained rooms within a hotel infrastructure - or buy-to-let hotel units), to private buyers and large multinational tourism operators interested in participating in the business in several modes.

The property developer may also use this plot of land to build a hotel for further operation, leasing or for sale to a third party. Building an Aparthotel and selling properties to individuals allows the new owner to recoup his costs almost immediately, especially given the current demand for holiday homes from La Palma in the German market.

Strategy: Investment in a land purchase and touristic project development, (with or without a joint venture with actual owner), to build a 4 star hotel or apart hotel of 500 beds in a sustainable destination and Biosphere Reserve zone.

Project duration: Estimated 20 - 24 months from inception to completion.


€6,863,800 for the land

€29,640,000 for the total construction and other costs to be invested in a period of 24 months as the development program indicates.

This project can be cofinanced by the FEDER fund, (European Regional Development Fund), with 10%-15% of the total construction costs.

Investment Returns:

€47,830,000 gross income. Sales from aparthotel room and individual units.

€13,300,000 profit before taxes.

Key Advantages of this new plot of land:

  • There is a shortage of hotel and apart hotel accommodation in the island, currently 12,000 beds, to meet potential tourist demand, as indicated in the “Plan Territorial Especial de Ordenación de la Actividad Turística de la Isla de La Palma”, (Special Territorial Plan for the Regulation of the Tourist Activities in La Palma Island).
  • This new plot of land will get a subsidy or grant for the Canary Islands Government through the FEDER Fund to encourage foreign investment in the islands.This subsidy would be between 10%-15% of all the construction costs of the development and will be paid at the completion of the hotel or aparthotel. This grant would represent between €1.8 –  €2.3 million for the investor.
  • This new plot of land with license is in the name of a company HIspatur Turismo SA, with only 1 shareholder, the actual owner. This company has this plot of land as the only active and is up to date with its books and has no debts whatsoever. The investor will save about €500,000 in taxes and legal fees purchasing the company instead of the plot of land.
  • The Local Government opened a new international airport last May in the island of La Palma to meet the tourist demand and started to invest in November 2010 over €240 million in improving the infrastructures and services in the island.
  • The island of La Palma enjoys a tremendous demand from the German, Austrian and Swiss market as a tourist and retirement destination. Around 5% of the population in La Palma Island are foreigners from the mentioned countries.

La Palma Island was declared by UNESCO a Biosphere Reserve in 2002. The sustainable development strategy of the island includes night sky conservation as a basic heritage to put into value. Besides, in December 18th, 2006 La Palma was certified by the International Centre for Responsible Tourism as the first “Sustainable Tourist Destination” in the world. It also has been recognized internationally as a sustainable Tourism Destination by ITR (Responsible Tourism Institute).

The island of La Palma has also been awarded with five qualities of Biosphere Certificates: Biosphere Destination - Biosphere Hotel - Biosphere House - Biosphere Restaurant - Biosphere Discover.

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