As stated by the owner, the apartment is located in the center of the historical Alfama district. I think you can't find a better location in Lisbon.
The place was also very clean and the manager was super friendly and helpful.
The only thing you should keep in mind is that it can get extremely noisy (at least Friday and Saturday night when we stayed there).
There is a bar just downstairs and the party is going on till 3 am.