Rio’s Hotel Glória reopens as residences after two decades
Marcelo Naidich
Leo Pinheiro/Valor
After remaining closed for about two decades, one of Rio de Janeiro’s landmark hotels, Hotel Glória, in the neighborhood of the same name on the city’s South Side, has finally returned—this time as a luxury residential development called Glória Residencial. Since businessman Eike Batista bought the property in 2008, the same year it closed for renovations, the retrofit project has encountered difficulties and changed hands several times. In 2020, Opportunity took control, an asset-management and investment group founded by Daniel and Verônica Dantas and Dorio Ferman.
The first of the development’s 266 apartments was delivered this month. The units range from 77 to 311 square meters and span three towers. Total investment exceeds R$500 million, Opportunity reports. SIG Engenharia became a partner in the development in 2022. Its gross sales value (VGV), or the potential revenue from selling all units, exceeds R$750 million.
Real estate experts say the difference between the investment and the gross sales value does not represent the development’s profit. VGV estimates the project’s potential from apartment sales, while the investment figure covers the funds allocated to the project. The final result also depends on other costs, including taxes, sales expenses such as brokerage fees, construction costs, and financial expenses. Profit therefore cannot be calculated simply by subtracting one figure from the other. Opportunity does not disclose its expected return margin.
The neoclassical Glória building opened in 1922 and was designed by French architect Joseph Gire, who also designed the Copacabana Palace. Its guests included Brazilian presidents and famous figures such as physicist Albert Einstein and actress Marilyn Monroe.
Strategically located near Catete Palace, the seat of the Brazilian presidency until the federal capital was transferred to Brasília in 1960, the hotel originally had 150 rooms. The National Historical and Artistic Heritage Institute (IPHAN) has listed the building’s facade.
According to Opportunity, about 60% of the 266 units had been sold by August, equivalent to 160 apartments. The latest prices disclosed during the sales phase ranged from R$1.3 million to R$5.7 million, depending on the apartment’s size and floor plan.
Before becoming a residential development, the Glória underwent a succession of changes in plans, owners, and projects. Batista bought the hotel for R$80 million in 2008, intending to turn it into a luxury hotel. The plan was to renovate and reopen it for the 2014 World Cup as part of the city’s revitalization. Construction was halted in 2013 amid a crisis at EBX, Batista’s holding company. The entrepreneur had a series of interconnected businesses under the EBX umbrella that suffered a crisis of confidence after production forecasts at OGX, the group’s oil company at the time, failed to materialize. The conglomerate was plunged into a financial crisis that led several of its companies to enter court-supervised reorganization. OGX itself was the first to seek court protection, in 2013.
Against this backdrop, the Glória modernization project began to encounter difficulties. The Brazilian Development Bank (BNDES) approved R$200 million in financing for the renovation in 2010. According to records from the Federal Court of Accounts (TCU), R$50 million was disbursed and later settled with the bank, based on data from the development bank itself.
In 2014, an attempt was made to sell the property to Swiss fund Acron, which announced a transaction worth about R$200 million. However, Valor reported that the deal did not move forward. The property ultimately passed to Mubadala, Abu Dhabi’s sovereign wealth fund, during the renegotiation of the Eike group’s debts. Mubadala was one of the businessman’s largest creditors and took control of several assets during the restructuring of Batista’s group.
After taking over the hotel, however, Mubadala struggled to find partners for a hotel operation amid an oversupply of rooms in the city following the construction of new developments for the 2014 World Cup and the 2016 Olympics.
The idea of converting the hotel into residences did not originate with Opportunity. In 2018, Italian businessman Carlo Menichini, cofounder of high-end stone company AHTV, based in the capital of the United Arab Emirates, approached Mubadala and Rio City Hall about converting the property into a mixed-use development with hotel and residential areas, according to a Valor column published at the time. The proposal called for apartments ranging from 120 to 140 square meters, priced between $1.2 million and $1.8 million.
Mubadala decided not to proceed with the renovation. The Glória did not fit the fund’s strategy or its real estate market focus, so Mubadala began seeking a buyer. Opportunity completed the acquisition in 2020 following a dispute with Cyrela Brazil Realty, O Globo reported at the time. Real estate industry sources estimated the transaction at about R$90 million, although the amount was not disclosed.
Opportunity said its purchase of the Glória began taking shape in 2019. The new project was launched in 2022 after the development was approved and structured. The modernization plan also changed: What was originally a hotel renovation intended to restore the property to hotel operations became a residential project.
Marcelo Naidich, commercial and new business director at Opportunity Imobiliário, said the project required rebuilding the building’s internal infrastructure for a purpose different from its original use. “We have other examples of developments in which we combine the new and the old,” Naidich said. The Glória, he added, combines the building’s historic value with the needs of a contemporary residential property in the area.
The conversion involved about six kilometers of drilling for new foundation piles, 100 kilometers of piping, and 890 kilometers of wires and cables, Otavio Grimberg, cofounder of SIG Engenharia, said. The engineering team had to create systems that did not exist in the old hotel in the same configuration, including new water, gas, and electricity networks for the apartments, he said. The existing structure also constrained the work because the building’s facade is protected as part of Rio’s municipal cultural heritage.
Preserving the facade was a primary concern. Meanwhile, the interior structure could undergo more extensive changes, including the demolition of floor slabs. The developers also negotiated permission to replace the old wooden window frames with aluminum models while preserving the building’s exterior characteristics.
SIG considers projects like this more unpredictable because some structural conditions can only be identified once construction is underway. The work involved adapting a building more than a century old to modern safety, infrastructure, and comfort standards.
Construction costs also changed. When the development was launched in 2022, the announced investment was R$250 million. In the latest update, Opportunity’s Naidich said total spending had exceeded R$500 million. For the fund, the project’s appeal lies in its combination of location, property features, and historic value. “We view the project as a business. We are committed to delivering the best product for both our customers and the surrounding area. And we undertake each project intending to make it economically viable,” the executive said.
The company said most buyers intend to live at the property. Of the owners, 60% are from Rio, 27% are from other states, and 13% are from other countries, including the United States and the United Kingdom.
Claudio Hermolin, president of Sinduscon-Rio, said Glória’s location is the main factor supporting the development’s prices. The Glória, Catete, and Flamengo neighborhoods are close to Flamengo Park and Flamengo Beach, an area with a broad range of services, Hermolin said. The area also offers views of traditional Rio landmarks, including Sugarloaf Mountain, Guanabara Bay, and Christ the Redeemer.
Hermolin estimates that new properties cost about R$16,000 per square meter in the Glória, R$18,000 in Catete, and between R$20,000 and R$22,000 in Flamengo. Prices vary according to the development’s location and infrastructure. The reopening of Hotel Glória after such a long period marks a new chapter for one of the most important properties in the city’s history.
Translation: Todd Harkin
