According to Savills’ presentation during the conference “Smart Miles”, «in a timeline which goes from 2011 to 2020, it becomes clear that there is a badly organized and loose real estate market in Portugal. The offer exists, as well as quality within the buildings available for the logistic segment, a factor that induces some instability all over the country. On the other hand, we witness a hiatus in terms of new projects as well as in terms of dedicated developers».
Nuno Esteves, Associate at Savills’ Development Department, highlighted that there are still many active units which have become obsolete in terms of the current needs, at a time when investors are seeking more liquid assets with quicker exits. Risk is thus relatively low and there isn’t much investment in speculative construction.
«The concentration of offer on suburban areas and the yield compression in other types of assets has led to the Logistic Prime Yield attractiveness. In this way, investment opportunities and the existence of a pipeline can be identified, as well as the launch of some speculative construction projects, which are still insufficient to meet demand», he commented.
This demand should push the growth of new offer and the amount and quality of the assets. Savills believes that the BREEAM and LEED certifications will aid in this process, by becoming a movement and a necessity. On the other hand, concerning rental prices, it estimates an increase in the short-term and a stabilisation in the mid-term, «which will evolve towards towards increased competitiveness in the long-term».
