Officially presented in Lisbon this Thursday, the study shows the opinions of the 900 investors surveyed, and shows the Portuguese capital on top of the investors’ choices for the first time, «benefiting from a market that is reaching the end of a cycle» on a European level, explained Lisette van Doorn, ULI Europe’s CEO.
This report shows that investors take more and more into account factors like quality of living or transport and accessibility when chosing a city to invest, and Lisbon is no exception. «Investors care increasingly more about issues like housing, emmigration, the environment and these are factors that gain more importance with each passing year». Lisette van Doorn also notes that «the assets’ value is becoming more and more redefined and less and less measured by financial indicators alone. There is an increasing interest in investing in common areas, in urban renewal, in a community», increasing the importance each project might have to its surroundings. «But the doubt is still on how to measure that value», she alerted.
Lisbon benefits from the European «late cycle»
As pointed out by Lisette van Doorn, the European real estate market has already reached, in general, the end of a cycle. 41.3% of respondents believe the market to be «close to the end» of the cycle, and some believe that the end has already been reached in Europe.
A proof of that is that the alternative segments are dominating the investment intentions, with co-living at the top of the list, followed by logistics, assisted living and care centres, flexible offices, data centres, students residences, serviced apartments, real estate developments or public housing, which closes the top 10. «Most of these segments have beds. This an end of cycle play but housing is less exposed to change, and guarantees more flexibility», explains ULI’s CEO.
On this conference’s debate panel, Luís Carita, from SILVIP, noted that Lisbon still attracts many investors who are able to meet their profit expectations there. And Eduardo Abreu, from Neoturis, attests that there are investors interested in large scale projects, for example «1.600 hostel beds. For that, you need to have a lot of confidence in the city», despite the obvious lack of product. «This makes us think that the city had some structural development in the last few years, and it won’t drop below a certain level anymore». And he points out «it’s not only institutional investors who are investing, but there are also family offices».
Carlos Cercadillo, from Cerquia, states that the company «is still interested in Lisbon, we have a lot of work to do, and product is still missing». Besides that, «Lisbon is a wonderful city to live in». But he alerts: «the city wasn’t prepared for so much demand, nor the City Hall, nor the builders, in here the cruise speed was very slow».
The city faces several challenges. Francisco Horta e Costa, Chairman at ULI and Managing Director at CBRE Portugal, alerted that «the companies’ attraction is only possible together with all the other components, in particular with housing and real estate development», highlighting also the need to speed up the licensing procedures in the municipalities. For Luís Carita, the housing prices are «critical». Carlos Cercadillo remarks that «prices are too high, they do not match the country’s reality».
Concerning the recently created REITs, specialists believe that «they will become a gateway to enter the capital, it is important that there are other investment possibilities»