By Antoni Galbany, Contributing Reporter

RIO DE JANEIRO, BRAZIL – After the pacification of the Vidigal favela community last November 2011 and subsequent UPP (police pacification unit), area real estate prices have experienced an increase of up to fifty percent, in some cases more. Along with this interest and speculation, is a proposed five-star luxury hotel being built by Helio Pellegrino, Antonio Rodrigues (owner of Bar Belmonte) and Conrado Denton at the very top of Vidigal.

The view from Vidigal includes Leblon and Ipanema beaches, Rio de Janeiro, Brazil News
The view from Vidigal includes Leblon and Ipanema beaches, photo by Nathan M. Walters.

The flashfire activity in the real estate market is due to the relative safety of the streets following pacification, the amazing views overlooking Ipanema and Leblon beaches in Zona Sul (South Zone) and the proximity to Rio’s most affluent area.

The owners of the future hotel spoke with Brazilian press O Globo about how the construction of the hotel has and will have many benefits for Vidigal’s residents. Among these, there employment opportunities created for the community workforce.

Andreas Wielend, an Austrian expatriate living in Rio who owns the popular Alto Vidigal hostel and party venue located next to the new hotel, notes that it can be a positive thing to have a luxury hotel there, as long as it is not isolated from the rest of the community:

“Most likely it will bring many favela residents into the middle class or even upper class as their properties are worth more and more. But some other people on the very poor side with no jobs on a regular base will have it hard to survive where prices are getting closer to the Zona Sul standard”, affirms Wielend.

At a glance, a five star hotel investment and development would appear to improve residents’ quality of life. However, the construction of luxurious hotels and homes in Vidigal may also bring difficult consequences for residents with fewer resources, as it brings the increase in rent and the cost of living – in a word, gentrification.

The five star luxury hotel is under construction in Vidigal, Rio de Janeiro, Brazil
The five star luxury hotel is under construction in Vidigal, photo by Antoni Galbany.

Isabella Imóveis, a real estate agency, is working to leverage this gentrification process by helping land owners to get a fair price by adding value and upgrading the physical structure and appearance of people’s properties. NGO Vidigal Feliz, on the other hand, also works to raise the social and economical level of infrastructure with sustainable growth in education and income by educational, social or community projects.

With the arrival of such a large investment into the community of Vidigal, some residents are voicing concern and becoming wary of what negative scenarios could unfold. Mariana Albanese, who has been writing Vidigal Blog for the last year, tells how people are afraid of being removed from their homes as a result of luxury building projects in Vidigal like the hotel, known as “the 314”.

“Why would anybody want to build a five stars hotel investing R$ 1.5 millions in a place that lacks of infrastructure for touristic complexes? There must be something really wrong,” Albanese explains to the The Rio Times.

After the O Globo article was published in early May, sources say hotel construction was ordered to stop pending some zoning issues. From a real estate developer perspective, these kinds of factors will continue to make development projects high-risk as the city catches up with the growth of the market.

Correction: July 12, 2012
The article was first published with the names of the developers incorrect, and in addition Conrado Denton wrote to us to say they are building a boutique hostel, not a five-star hotel.


  1. this is a stupid idea and will not be a good investment. Only very naive tourists would pay for a 5* hotel located in a favela. Amazing views are a dime a dozen in Rio. The timing is definitely too early for this one.

  2. Get used to it, Vidigal is the next Brooklyn Heights, gentrification cannot be stopped.
    Nor should it.

  3. Don’t be so naive Tom. Now is the perfect time to be making these kind of investments.
    I’m sure this guy stands to be very successful doing this unique and fascinating idea, there are already many pousadas located in favelas in and around Rio that do very well.
    For sure there will be a market for people wanting high end accommodation, surrounded by exotic environment.
    Good luck to him I say!

  4. I always thought that in any other country the hillsides with beautiful views would be snatched up by developers. With pacification (it was good to get rid of the trafficantes) come gentrification and I’m afraid the people living in Vidigal will all eventually be displaced. Unfortunatley the weakest and poorest of us always get the shaft. I can see it coming in Vidigal. What’s next Rochina?

  5. The city of Rio is experiencing a unique time in its history. After so many years of Brazilian economic stagnation, and the problems of violence there, it’s all changing for the better. Investing mainly anywhere within the city limits is very smart, because the cost now is still considerably low. Those who build now will see the good results 20 years from now.

  6. Good point by Carioca.There is not any land to build on for developers in RIO city,so if they clear the favellas of poor people they will free up land that is actually worth a fortune.The poor people will have to get used to taking 3 hour bus journeys to get to work,the same as many people do just now.
    The hotel will work if they get the views right and have their own taxi service.

  7. In reply t Curmudeon. Gentrification can be and should be stopped, when your displacing people.Whay not build affordable apartments and homes for the people that are already there. Too many Brasilians, have this foul attitude about the poor. They think as do many around the world that its there own fault that they don’t have any opportunities. Hell, you’ll eventually get priced out too, You won’t be able to go to Ipanema or Leblon for lunch not to mention stay in a hotel, buy or rent an apartment there. WIll gentrification still be OK to you then?

  8. This is going to generate jobs for local people, that is good. Now i am interested in finding out what will happen after the world cup and the olympics when the police leaves?! they won’t stay there forever…


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