The apartment is located right in the historic center and across the street from the National Palace. It is also near the 434 bus stop that takes you to the Palace of Pena and the Moorish Castle. It is located above the Centra Centre souvenir shop where you pick up and drop the keys. The ladies there are very sweet.
Parking - It is a big issue and something to consider when choosing this apartment. There is no parking allowed in the historic center. We were traveling off-season so we were able to park for the 3 nights we were there about 1/2 block from the apartment. Pure luck! The only problem is we had to buy a parking pass every 4 hours(it is only 2 euros) and put it in the window from 9AM to 5PM. By doing this, we avoided parking tickets. The only downside to this is you need to be back at the apartment every day midday.
We would also suggest you to stop at a big grocery store along the way there and pick up what you will need as there is really nowhere to buy much in the historic center. The prices in the center are of course high for most everything so plan accordingly. We were able to cook most of our meals in the apartment as it equipped quite well.