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2017 / iberian.propery // 75
ISSUE: TOP IBERIAN Investors //dossier
The Iberianmarket consists of two different realities: the Por-
tuguese and the Spanish one. Beforemaking any investment
decision at an Iberian level, one should have a clear knowl-
edge of these local markets, its specific attributes andwhat is
expected fromeach one in terms of size, liquidity and return.
Business plans are based on assumptions that can differ
a lot from Spain to Portugal. The Spanish market size, as
well as its population and economy, are much larger than
the Portuguese market. There are also differences between
both markets when we compare items such as liquidity,
yields, tax regimes which apply to investment vehicles,
property and lease laws.
To set up an Iberian investment strategy can be challenging
because many times the decision centers of multinational in-
vestment companies are geographically far from the countries
where the investments are being made. This can be partially
overcome if investment companies are advisedby local experts
with deep knowledge of the particular drivers of the market.
For instance, take the example of valuations, which arewidely
used and relied upon in a diversity of purposes. In a context
of an Iberian strategy it is key that this advice is consistent,
transparent, and contributes to promote confidence in the
markets. Firms “
Regulated by RICS”
are the most suitable
to provide such advice, as they are both committed to the
highest standards and open to independent scrutiny.
Miguel Bacalhau
The K Advisors,
Head of Valuation,
MRICS
At the moment, the lack of some types of product is clearly
the principal challenge in capital markets in the Iberian
Peninsula. Indeed, the appetite of international investors
remains, but supply is limited and presents values that we
believe are borderline sustainable for some asset segments.
In Portugal, as well as the market restriction described above,
we have also been faced with a lack of financing by banks
for the property sector.
Iberian capital markets have existed for some time, since
international investors analyse Portugal and Spain as one
region, usually beginning in Madrid and then widening their
horizons to Barcelona and Lisbon.
Therefore, although there are clear differences that dis-
tinguish the markets, namely their practices, the Iberian
Peninsula is analysed as a whole and any risk assessment
takes this factor into consideration.
For the market to be almost perfect, we would only need
the investment that originates in Spain and flows to Portugal
to run in the opposite direction as well, and that will be a
difficult challenge to overcome due to the small scale of
Portuguese players.
In conclusion, we do not believe that there are substantial
Jorge Bota
B.Prime
Managing Partner
The Portuguese and Spanish markets have very different
dimensions. Therefore, it´s not always possible to find assets
that are properly adjusted to each investment strategy and
market. However, in recent years we havewitnessed a greater
maturity of the Portuguese market and an alignment with
the Spanish market.
Furthermore it is important to refer that incentive conditions
for international investors should be taken into account,
bearing in mind that each country has its own legal and tax
studies/fiscal structures. As an example, we can mention
the REITS (Real Estate Investment Trust), better known as
Socimis in Spain. Thus, there must be an adaptation to the
same investment vehicles and rules in both realities.
We are convinced that there will be news about this subject
in Portugal soon, considering that some new alternatives are
being studied. As we mentioned before, the maturity of the
Portuguese investment market in the last 3 years has been
crucial to help reach the quality level of the Spanish market.
We also believe that the strengthening of these vehicles
and the existence of common Iberian platforms can make
a difference, since they have a significant relevance which
may trigger the interest of more investors.
Pedro Rutkowski
WORX
CEO