Alternatives to the annual fortnight in Marbella

For most people, the idea of making a long-term financial commitment to a particular European holiday destination tends to arouse images of aggressive timeshare touts. In recent years, however, alternatives to the annual fortnight in Marbella have become available.

"Developer-operators" are hybrid companies that invite you to invest in the bricks and mortar of the resort where you spend at least one holiday a year. The idea is simple: buy an apartment or house at the resort of your choice, and when you're not holidaying there, the operator will lease it back and let it on your behalf. As well as capital growth, you will also get a secure monthly rental income.

But for anyone dogged by that timeshare image, you could be forgiven for thinking the whole concept is a bit naff. Resorts based, as many are, around golf courses might be fine for middle-management executives but for more discerning punters they hardly reek of exclusivity.

The leaseback concept was pioneered in France in the 1980s, part of a wider government initiative to increase levels of holiday accommodation. Now there are schemes in South Africa, Morocco the United States and other countries.

The resort of Martinhal, currently under construction in a secluded pocket of the Algarve in Portugal, is an example of the latest development in the trend - selling upmarket investment opportunities as lifestyle packages to well-heeled punters. When complete, some time in 2008, the facilities will include everything you'd expect from an establishment aimed at the higher end of the market. In addition to 129 individual properties, each with their own beachfront site, the resort will also boast a five-star hotel (designed by in vogue architects Conran & Partners), health and tennis club, restaurants, spa, even its own village square and general store - elegantly rendered, naturally.

"The amount of development in some parts of the Iberian peninsula is astounding," explains Ruth Gallop, Martinhal's marketing director. "It's quite hard to sell a dream when everyone is piling into the franchise. What we're offering is a sound investment with a luxury lifestyle attached." Indeed, Martinhal is the brainchild of hotel entrepreneurs Nigel Chapman and Nicholas Dickinson, founders of the high-end Luxury Family Hotels.

Consequently, a certain amount of thought has gone into developing upmarket credentials for their new venture. Martinhal is in Portugal's Costa Vincentina National Park, a protected area where no other licences have, or will, be granted. And there's not a golf course in sight.

Projected returns on investment tend to be realistic rather than spectacular. Buying into Martinhal guarantees a rental of 4 per cent of the purchase price for the next 10 years, in addition to any capital growth that accrues. Purchases are on a freehold basis and, with the resort then leasing back the property, owners can spend up to eight weeks at the resort. Prices range from €220,000 (£150,000) for a studio apartment, to €560,000 for a three-bedroom villa, and all but five have been sold.

Those buying into the holiday sector want first to visit the site where not only their money but also their holidays will be for years to come. "It's a very personal investment," explains Gallop. Purchasers are between 35 to 55, and a high percentage have young families. "Not only will there be capital growth, but holidays are part of a family growing up," she says. "We have investors who visualise having their family holidays here for the next 10 to 15 years."