Despite 2021 having started with a new lockdown, commercial real estate investment should surpass the volume traded in 2020, which had the third best market result ever, having reached around 3 billion euro, a 7% yoy increase.
The numbers are from Prime Yield, part of Gloval, which presented this week the 2021 edition of the “Guia de Investimento para SOCIMIs e SIGIs” (Investment Guide for SOCIMIs and SIGIs – Spanish and Portuguese REITs respectively), which showed that, despite the uncertainty and cautiousness which marked the first months of the year, there will still be «a strong upturn in investment during the second half of the year», led by international investors, but «with an increasingly stronger presence from national investors».
Nelson Rêgo, Prime Yield’s CEO, explained that, apart from offices, which remain preferential targets, the segments which remain more attractive for investment are logistics, whose demand sky-rocketed following e-commerce’s massive growth; new sub-segments within housing, especially build-to-rent and student residences, as well as hotels, which, despite having been deeply impacted in terms of occupancy, remain under the investors’ radar.
He further highlighted that «we are all aware that tourism was one of the segments to be most impacted by the pandemic and that the prospects for its recovery and hence its operational performance, are not encouraging, even for the current year. However, hotels, due to their high quality, continue being sought after for investment and are becoming, under the current situation, particularly appealing for vulture funds».
Hotel investors are now looking for «assets located in the Algarve, as opposed to Lisbon and Porto. The reason for this is that a quicker recovery is expected for the sun, beach and golf destinations, which are characteristic of Southern Portugal, than for business and urban tourism, where Lisbon and Porto lead».
On logistics, Nelson Rêgo remarked that this segment «emerged as a product of great interest due the online sales massification the pandemic brought, although we have to adapt to the lack of product and to the operators’ requirements. It will not be unusual that, under this scenario, we will increasingly see more investments during the marketing stages. In terms of housing, the student and senior residences and co-living will continue to attract interest, with several projects already being developed and others about to be released».
But the great promise is the built-to-rent segment, which has an immense growth potential. Achieving institutional rental prices attractive to investors would be important to help families pay rents compatible with their income», he concluded.