Sale and leaseback: Launch of Call 50 | Tourism and Industry


Call 50 is aimed predominantly at companies that own properties used for tourism and industrial activities

Sale and leaseback: Launch of Call 50 | Tourism and Industry
November 18, 2022

On November 17, 2022, as part of the “Reactivate Tourism | Build the Future” initiative, TF Turismo Fundos-SGOIC, S.A. (“Turismo Fundos”) launched Call 50 | Tourism and Industry (“Call 50”), a financial instrument that aims to provide funding through sale and leaseback operations (the sale and subsequent long-term lease of a property with a repurchase option) that will ensure investment in:

(i)                 adapting, rehabilitating and modernizing properties used for tourism or industrial activities; or

(ii)              reconverting properties located in low-density territories for tourism activities.

The focus of this initiative is on achieving environmental, social and economic sustainability goals.

>          Target: Call 50 is aimed predominantly at companies that own properties used for tourism and industrial activities, in sale and leaseback operations.

>          Budget, term and maximum amount: The Call 50 budget is €50 million. Sale and leaseback operations may involve the acquisition of real estate by the fund, up to a maximum threshold of €6 million, to be subsequently leased for a maximum period of 15 years. The acquisition price of the property for the fund must be equivalent to a maximum of 85% of the simple average of the property’s appraised value.

>          Eligibility conditions for properties and applicants:



> To be free of encumbrances or charges (on the date the operation is implemented)

> Land and tax register affairs in order

> License of use or use permit (where applicable)

> Energy certificate (where applicable)

Properties located in low-density territories that are to be used for tourism activities must also have a building permit with payment due or already issued.

> Tax and social security affairs in order

> Registered in the Beneficial Ownership Central Register (BOCR)

> No (unjustified) incidents on the record kept by the Central Credit Register (CCR) of the Bank of Portugal



>          Rent and guarantees: The annual rent will be calculated by applying a 4% rate on the acquisition price (excluding municipal property transfer tax, stamp duty, and deed costs). The rate may be lower—starting at 2.5%—for properties located in low-density territories that are used or are to be used for tourist activities.

The rent will be paid monthly and will be updated annually in line with the annual updating coefficient for property leases.

As security for the prompt payment of rent and other obligations, depending on the operation, Turismo Fundos will stipulate the amount and the type of guarantees to be provided (e.g., security deposit, bank guarantee, escrow account, personal guarantee, or any other guarantees for the amount of the investment in the property).

>          Purchase option and respective acquisition price: From the third year through to the end of the lease term, the tenant can exercise its right to purchase the property.

Depending on the operation, Turismo Fundos may demand a purchase obligation at the end of the lease term. Should this happen, purchasing the property at the end of the lease would no longer be a mere option, but an obligation.

>          The price for the tenant to acquire the property by exercising the purchase option (or, where applicable, the purchase obligation) will be determined by the following:

Original acquisition price when acquired by the fund, updated annually on each anniversary of the contract in line with the variation in the consumer price index (CPI) published by the National Statistics Institute. If the CPI variation is negative, the update will be limited to zero. Consequently, the acquisition price for the tenant will never be lower than the original price at which the company sold the property to the fund.

>   Conditions for applying the amount to be paid by the fund

The price the fund pays to acquire the property will have to be used by the owner/tenant for:

(i)        investments in adapting, rehabilitating or modernizing the property that contribute to economic, social and environmental sustainability, and a minimum limit of 20% of the acquisition value is established for investment in fixed capital, whether tangible or intangible; and

(ii)       settling debt to financial institutions (maximum limit of 60% of the acquisition value) and investment in working capital.

>          Sale, invest and lease operations: For operations where the applicant is not the owner of the property, the applicant/future lessee will have to invest in the property, in line with a minimum limit of:

(i)        25% of the amount for which the fund acquired the property, in the case of properties currently used for tourism activities; or

(ii)       50% of the amount for which the fund acquired the property, in the case of properties for which the investment involves converting the property for tourism use.

In this type of operation, Turismo Fundos can demand guarantees not only for the payment of rents and other obligations, but also for the actual materialization of the investment.

> Contractual obligations that can be demanded of the tenant: The tenant will be responsible for all charges related to the property, including multi-risk and civil liability insurance.

Depending on how Turismo Fundos frames the operation, in certain cases, it can demand obligations to maintain employability or to develop economic, social and environmental sustainability measures.

> Submission of applications and workflow analysis

Applications must be submitted electronically using the electronic forms available for Tourism and Industry, respectively.

The application review process consists of four phases:

Phase 1

Phase 2

Phase 3

Phase 4

Proposal analysis/ framework


Once this phase has been completed, a minimum provision of €2,500 is required.

Valuation of the property by two expert appraisers[1]


The applicant assumes this cost.

Communication to the applicant of the values the expert appraisers attribute to the operation

If the applicant confirms its interest in the stipulated value:

Assessment phase for the economic and financial viability of the operation.

If the decision is favorable, Turismo Fundos will communicate the respective conditions and may make its decision subject to preconditions.

In short, Turismo Fundos has a certain degree of discretion when deciding on the operation, including with regard to (i) the preconditions; (ii) determining the purchase option or purchase obligation of the applicant at the end of the operation; (iii) the provision of guarantees; (iv) the obligations to maintain employability or to develop economic, social and environmental sustainability measures; (v) the term of the operation; and (vi) the rates to be applied to the acquisition value for determining the rent for properties used or to be used for tourism activities that are located in low-density territories. For this reason, the applicant must bear in mind the broad definition that Turismo Fundos assigns to contractual conditions, which may affect the applicant’s investment plan significantly.

To assess the viability and impact of the sale and leaseback operation on its business, the applicant should first carry out a due diligence to confirm (i) that all the eligibility criteria have been met; (ii) the commitments the applicant has undertaken that may imply the sale of the asset to the fund (e.g., financing contracts, hotel management contracts and supply contracts); and (iii) the tax impacts of the operation.

[1] In accordance with the General Regime for Collective Investment Undertakings (RGOIC, in its Portuguese acronym) approved by Law 16/2015 of February 24.


November 18, 2022