Historic Baronesa Palace in Lisbon to be converted into luxury aparthotel with €29 million green loan
The Dutch hotel group The July has secured a €29 million syndicated green loan to convert the historic Palácio da Baronesa in Lisbon into a luxury aparthotel. The announcement was confirmed in a statement from BPI, which is participating as an agent bank in the financing syndicate, contributing €14.5 million to the total amount. The transaction, advised by real estate agency CBRE, signals a significant foreign investment in Lisbon's premium hospitality sector.
The project involves the complete renovation of the 16th-century palace, located in Largo do Conde Barão, a strategic area of the capital. The loan, which has a 15-year term, is specifically designated as 'green financing', intended to ensure the redevelopment meets high standards of environmental sustainability. This aligns with a growing focus on sustainable practices within the European real estate and construction industries.
The future aparthotel will comprise 88 accommodation units, a restaurant, a spa, a swimming pool, and a 1,200 square meter garden. The development aims to blend the historical character of the palace with modern luxury amenities, targeting the high-end tourism market. The project is a notable addition to the portfolio of The July, a company founded in 2012 that specializes in premium aparthotels and currently operates properties in Amsterdam and London.
According to a BPI spokesperson, "This operation reflects our commitment to supporting sustainable projects that add value to the city and its heritage. The conversion of the Palácio da Baronesa is an exemplary project that will enhance Lisbon's tourism offerings." The choice of a green loan structure underscores the increasing importance of ESG (Environmental, Social, and Governance) criteria in large-scale financing operations within the European Union.
The architectural plans for the palace prioritize the preservation of its historical façade and significant interior elements, while integrating modern infrastructure and energy-efficient systems. The construction phase is expected to create a number of local jobs and involve specialized craftsmanship to handle the restoration of the historic building. The project is part of a broader trend of rehabilitating historic buildings in Lisbon for new uses, particularly within the hospitality sector.
The July's expansion into Portugal is part of a wider European growth strategy, with new locations also planned for Dublin and another in Amsterdam. The Lisbon aparthotel is scheduled to open in 2026, positioning it to capitalize on the city's continued popularity as a global tourism and business destination. The project is seen by market analysts as a vote of confidence in the long-term stability and growth potential of Lisbon's real estate market.
A representative from CBRE, which advised the investor, commented, "The Lisbon market continues to attract sophisticated international investors. The Palácio da Baronesa project is a perfect example of combining a unique historical asset with a strong business model, backed by sustainable financing. We anticipate strong market interest in this property upon its completion."
The development is expected to have a positive economic impact on the local area of Largo do Conde Barão, attracting more visitors and potentially stimulating further investment in surrounding businesses. The addition of 88 high-quality accommodation units will also contribute to meeting the growing demand for premium lodging in the Portuguese capital.
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