Palma Beach – Mallorca’s one to watch?

There can be many few areas of Mallorca undergoing such a transformation right now as Palma Beach. It’s also hard to think of one that offers as much scope for capital growth.

Whilst there are investment opportunities in Cala Mayor and some upgrading and re-branding going on in Magaluf (or rather Calvia Beach Resort) on one side of Palma Bay, what’s happening on the opposite side, at Playa de Palma, is perhaps more intriguing.

If you are one of those who have been holidaying there for decades, you will have noticed the changes along the 5km stretch of wide Blue Flag sandy beach with its long Paseo Maritimo promenade dotted with palm treesand numbered balnearios. If you haven’t been for a few years, it’s worth another look.

The sun loungers for hire have been going upmarket, half of the beach bars have been smartened up and you’ll probably hear a few more languages being spoken than just German. Behind the beach, chic new restaurants have opened up - like Ginger Beach with its fresh fruit smoothies and Bonito’s street food and cocktails - that provide a taste of Miami Beach, and the next row back, new five-star hotels such as the Pure Salt Garonda, Iberostar and Llaut Palace. Even the area’s first boutique hotel, My Sea House Flamingo.

The area’s move upmarket - and rebranding as “Palma Beach” - has been catalysed by a private consortium of hoteliers, restaurants and services set up in 2014 to spear head the €350 million upgrade. At the C'an Pastilla end, home to Purobeach club, the tourism is already diversifying, especially between balearios 7 and 15.

But the El Arenal end (bars 1 to 6) will take a few years longer, reckons Mika Ferrer of the consortium, who is busy arranging sporting and family events to extend the season in the area. Expect to see Californian style yoga on the beach, children’s running events and kite-surfing fixtures.

With its proximity to the airport (less than 10 minutes) and Palma Old Town (you don’t even need to hire a car for your holiday) there’s no reason why this area shouldn’t attract a wider range of buyers. The superb beach is a real selling point, and prices are affordable: €175,500 for a studio with a sea view, around €279,000 for a large two-bedroom apartment, to villas from €500,000.

The many seafront apartments offer good potential, with resale properties in need of an update from €2,500 per sq m. With Swedish entrepreneurs looking to buy buildings to open more boutique hotels, it’s clearly an area already on its way up. Terence Panton, Managing Partner of Engel & Völkers’s new property shop in Palma Beach, comments that the same process happened a few years ago in Portixol. “This period of change is set to trigger a real boom on Palma Beach. We expect that prices will rise significantly in the next three years,” he says.