Lisbon Historic Center €15M Pombaline Conversion Targets 6% Net Yields with Serviced Apartments Strategy

Ando Living, a Portuguese hospitality group specializing in premium serviced apartments across Europe, has launched sales for its €15 million Pedras Negras House development in Lisbon's historic center, converting a Pombaline building into 20 luxury units with projected net yields exceeding 6%. The project on Rua das Pedras Negras—positioned between the Sé Catedral and Baixa in the Municipality of Lisboa, Distrito de Lisboa—represents a strategic bet on Lisbon's sustained appeal to high-end tourists and short-term rental investors seeking turnkey properties in Portugal's most coveted UNESCO district.

The development transforms a historic Pombaline structure—18th-century earthquake-resistant architecture unique to Lisbon—into serviced apartments ranging from 57m² studios to a 205m² penthouse, priced between €530,000 and €1.41 million with completion scheduled for Q3 2027. This pricing positions units at approximately €9,300-13,700/m², reflecting the premium commanded by fully renovated historic properties in Lisbon's tourist epicenter, where market data shows asking prices consistently above €5,900/m² citywide.

The project's strategic significance extends beyond its architectural preservation. By incorporating a rare private outdoor pool in Lisbon's historic core and maintaining original features like 3.5-meter ceilings and ornate frescoes, Ando Living targets the lucrative serviced accommodation segment where occupancy rates regularly exceed 90% with average daily rates above €270, according to Safak Nervo, the group's Chief Commercial Officer. This performance metric positions the development as both a lifestyle purchase and income-generating asset for international buyers.

The Pedras Negras House sits in the heart of Lisbon's Baixa district, the 18th-century downtown rebuilt after the 1755 earthquake using innovative Pombaline construction techniques. This area, served by the Green and Blue Metro lines at Baixa-Chiado station, represents Lisbon's most concentrated tourist zone within 500 meters of the Sé Cathedral, Castelo de São Jorge, and the Tagus River waterfront. The location's perpetual appeal to international visitors—evidenced by consistent accommodation demand even during shoulder seasons—makes it particularly attractive for investors seeking properties with immediate rental income potential through investment-focused agents.

For foreign investors, this micro-location offers multiple advantages beyond tourism fundamentals. The area's UNESCO World Heritage status ensures architectural preservation protects property values, while recent infrastructure investments including the nearby Green Metro Line extension and pedestrianization projects enhance livability. International buyers particularly value the walkable access to cultural landmarks, contemporary dining in neighboring Chiado, and connectivity via the 28 tram line that circuits Lisbon's seven hills. These factors combine to support both capital appreciation and rental income stability, as detailed in our comprehensive Lisbon neighborhoods guide.

Market Implications for Serviced Apartment Investors

The Pedras Negras House development signals robust institutional confidence in Lisbon's serviced accommodation sector, where serviced apartments—fully furnished units with hotel-like amenities and professional management—command premium rates from business travelers and affluent tourists seeking authentic neighborhood experiences. This asset class combines residential ownership with hospitality revenue streams, offering investors quarterly distributions while maintaining property appreciation potential tied to Lisbon's underlying real estate dynamics.

Ando Living's projected 6%+ net yield significantly outperforms traditional Lisbon residential rentals, where gross yields typically range 3.8-5.0% according to major Portuguese banks. The premium reflects several factors: professional management eliminating landlord responsibilities, tourist licensing enabling short-term rentals at daily rates 3-4x long-term monthly equivalents, and location-specific demand from international visitors willing to pay €270+ nightly for authentic historic center accommodations. For investors comparing alternatives, this yield spread compensates for higher operational complexity and seasonal fluctuations inherent in tourism-dependent revenue.

The development's tourist licensing provides operational flexibility crucial for maximizing returns. Unlike standard residential properties restricted to annual leases, licensed units can pivot between short-term (days/weeks), medium-term (1-11 months), and traditional annual rentals based on market conditions. This adaptability proved valuable during recent market disruptions, with many serviced apartment operators maintaining higher occupancy by catering to digital nomads, relocating professionals, and extended-stay leisure travelers seeking optimal rental yield strategies.

However, investors must navigate Portugal's evolving regulatory landscape. The Mais Habitação program—implemented in 2023 to address housing affordability—introduced restrictions on new short-term rental licenses in designated high-pressure zones, though existing licenses like Pedras Negras House retain operational rights. Additionally, the program offers tax incentives for properties committed to affordable long-term rentals, creating strategic considerations for owners balancing yield optimization with regulatory compliance. Understanding these provisions through consultation with English-speaking real estate lawyers familiar with recent legal updates becomes essential for structuring optimal investment strategies.

Ando Living's European Expansion Strategy

Ando Living Group has emerged as Portugal's leading serviced apartment operator, managing 12 operational buildings domestically with another 14 in development, positioning the group to capitalize on European hospitality market shifts favoring authentic, residential-style accommodations over traditional hotels. The company's expansion from 1,700 to 6,000 units by 2028 across France, Italy, and Greece demonstrates institutional investor backing and proven operational expertise attractive to yield-focused buyers seeking professional management.

The group's track record provides confidence for Pedras Negras House investors. According to operational data, Ando Living properties consistently achieve 90%+ occupancy with €270+ average daily rates, translating to reliable quarterly distributions. Their expansion pipeline—including five additional Lisbon projects completing by Q1 2026 plus developments in Porto and Comporta—suggests economies of scale in marketing, distribution, and operational efficiency that benefit individual unit owners through enhanced visibility and professional management.

Historic Building Rehabilitation Market Context

Lisbon's historic center rehabilitation market operates at the intersection of preservation requirements and luxury demand, where Pombaline buildings like Pedras Negras House command significant premiums due to architectural uniqueness and scarcity of developable inventory. The Pombaline style—characterized by earthquake-resistant wooden frameworks, ornate stonework, and original tilework—represents Lisbon's distinctive architectural heritage, with renovated properties regularly achieving €8,000-12,000/m² in prime locations according to market intelligence reports.

Several factors drive continued strength in this segment:

• Scarcity Premium: Strict preservation regulations limit alterations to historic facades while interior renovations require specialized craftsmen, constraining supply even as demand grows from international buyers seeking authentic Portuguese architecture
• Tourist Appeal: Visitors increasingly prioritize authentic accommodations over generic hotels, driving demand for character properties in historic districts where nightly rates command 40-60% premiums over modern alternatives
• Tax Incentives: Portuguese rehabilitation programs offer reduced VAT rates and potential IMT (property transfer tax) exemptions for qualified historic renovations, improving project economics for developers and end-buyers
• Capital Preservation: Historic properties in prime locations demonstrate resilient value retention during market corrections, appealing to investors prioritizing wealth preservation over speculative gains

The rehabilitation process requires specialized expertise beyond standard renovations. Projects must balance preservation requirements with modern amenities, often involving collaboration between architects specializing in traditional Portuguese architecture and constructors experienced in historic restoration. Successful projects like Pedras Negras House preserve original elements—ornate ceilings, stone walls, traditional tiles—while integrating contemporary finishes, luxury amenities, and compliance with current building codes including energy efficiency standards.

This approach creates distinctive properties commanding premium pricing. International buyers particularly value the combination of historic character and modern convenience, with many seeking turnkey solutions furnished by professional interior designers using local materials and artwork. The rarity of outdoor space in historic centers—exemplified by Pedras Negras House's private pool—adds significant value, as such amenities typically require complex licensing and structural modifications within protected building constraints.

Investment Considerations for International Buyers

For high-net-worth individuals evaluating Pedras Negras House units, the investment thesis centers on three pillars: immediate income generation through established hospitality operations, capital appreciation tied to Lisbon's premium real estate trajectory, and portfolio diversification through eurozone exposure in a politically stable jurisdiction. The projected 6%+ net yield provides attractive risk-adjusted returns compared to alternative European markets, particularly when adjusted for Portugal's relatively low operational costs and favorable tax treatment for certain foreign investors.

Due diligence should encompass several unique factors. Prospective buyers must verify tourist license validity and understand operational terms with Ando Living, including management fees, maintenance reserves, and exit flexibility. While the developer's track record provides confidence, individual unit performance can vary based on specific location within the building, views, and layout optimization. Engaging specialized inspection services familiar with historic properties helps identify potential issues like structural integrity, moisture problems, or preservation compliance that could impact future values.

Tax structuring requires careful planning. While Portugal's Golden Visa program no longer offers real estate pathways, the €530,000+ investment threshold may qualify investors for alternative residency options through the D7 passive income visa or NHR 2.0 tax regime benefits. Property ownership structures—direct personal ownership versus Portuguese holding companies—affect IMT rates (0-8%), annual property taxes, and eventual capital gains treatment. Professional guidance from English-speaking accountants familiar with property tax optimization becomes essential for maximizing after-tax returns.

Success stories in Lisbon's serviced apartment market validate the investment model. A French investor who purchased a similar historic renovation in Alfama for €680,000 in 2022 has seen valuations appreciate to approximately €850,000 by late 2025 while generating consistent 5.8% net yields through professional management. The key factors mirror Pedras Negras House attributes: prime historic location, tourist licensing, professional operation, and authentic architectural character that differentiates the property in a competitive short-term rental market.

Looking Ahead: Serviced Apartment Market Evolution

The serviced apartment sector appears positioned for continued growth as travel preferences evolve toward authentic, neighborhood-based accommodations that offer both hotel services and residential privacy. Lisbon's market benefits from multiple tailwinds: sustained tourism growth, increasing business travel as Portuguese companies expand internationally, and the city's emergence as a European tech hub attracting extended-stay professionals. These demand drivers support analyst projections of 8-12% revenue growth for well-located serviced apartments through 2026, outpacing traditional hotel performance.

For Pedras Negras House specifically, completion in Q3 2027 positions the development advantageously within Lisbon's tourism cycle. The ongoing recovery of international travel, coupled with Portugal's political stability and eurozone membership, creates favorable conditions for premium accommodations in historic districts. Ando Living's expansion to 6,000 European units by 2028 should enhance marketing reach and operational efficiency, benefiting individual unit owners through increased visibility and professional management expertise.

International investors seeking exposure to Lisbon's premium real estate through income-generating assets should consider the serviced apartment model as a hybrid solution combining capital appreciation potential with quarterly cash distributions. The Pedras Negras House opportunity exemplifies this approach: historic character in a UNESCO location, professional hospitality management, and projected yields exceeding traditional residential investments. For personalized analysis of how serviced apartment investments align with your portfolio objectives, consult with luxury property specialists experienced in investment analysis tools and legal structuring for international buyers. For expert guidance on Lisbon's evolving hospitality real estate opportunities, contact realestate-lisbon.com.