Oceânico Group (founded by Gerry Fagan and Simon Burgess 13 years ago) sold for just under €70m its full interest and ownership in Oceânico Golf, Vilamoura, to KAY CC Portugal, a consortium between Mr. Keith Cousins and the Dom Pedro Hotels & Golf Collection.
Keith Cousins is also co-running Elite Management, a management agency for footballers. Dom Pedro Hotels Group has got 8 hotels in mainland Portugal, the Madeira archipelago, and Brazil).
Oceânico Golf is the owner and operator of five of Vilamoura’s best-known courses – The Victoria Course (see picture below), The Old Course, Pinhal, Millennium and Laguna courses – with The Victoria Course undergoing final preparations for the hosting of the 10th edition of The European Tour’s Portugal Masters from October 20th -23rd.
The Oceânico Group will maintain ownership and management of its two other Championship courses, Oceânico Faldo and Oceânico O’Connor Jnr at the Amendoeira Golf Resort in Alcantarilha Silves.
What does it show us about the sale of Oceânico Golf by Oceânico Group?
All this happened after we heard that 2015 was the “best year ever” for tourism in Portugal, and especially the Algarve. I remember, last year I reported about really impressive first half-year results (500K+ rounds) of the Algarve. In 2015, in total, 1.2 million rounds (source: Algarve Tourism Association) were played. Of course, Oceânico Group heralded record booking figures.
The year 2015 was even better than 2007 for the golf tourism industry of the Algarve. The country was able to generate cca. €10 billion revenue from tourism (including golf tourism). By the way, 2014 was also a great year for Portugal tourism. The real estate market is also very positive about the future thanks to these changes.
What is also interesting about Algarve that it accounts for “more than a third of all hotel bookings in Portugal”. Algarve hotels registered 16.6 million bookings in 2015 – a 2.5% increase compared to the previous year – and 3.7 million tourists – a 3.9% boost. Hotel revenue reached a whopping €758 million (+10.2%).
I think the changes have started when the two founders, Gerry Fagan and Simon Burgess have stepped down. I can imagine at least 3 possible scenarios why they sold their golf courses:
- They received a very good offer;
- Their investments in the US (housing projects in North and South Carolina??) don’t go well or need more capital investment. Charlotte in North Carolina is now a very attractive city because of the job and population growth. This city has the strongest outlook for 2016.
- They see much more business potential in the US real estate market. PwC found that the US real estate market is showing growing confidence in the potential investment returns in key American cities and even in markets outside the 24-hour gateway cities.