This prediction is from Cristina Arouca, Head of Research at CBRE Portugal, which, on its latest report "The Impact of Covid-19 on Real Estate in Portugal" advanced that total commercial investment should reach 2 billion euro by the end of the year.
This number is lower than the initially expected 3 billion euro – registered in the last two years. But Cristina Arouca remarked that «investment turnover was very high over the first two months of 2020, achieving approximately €800 million in the end of the first quarter», thus leading CBRE to expect at least a number «much higher than the 1.3 billion euro registered in 2007, the best year before the global financial crisis».
Despite the fact that no relevant transactions were recorded over March and that we are facing «an almost complete suspension of new sales processes on the market», there are several players with available capital who show interest in investing in the acquisition of assets even now. Regardless, and given the circumstances, «the closure of several deals may spill over into 2021».
On the other hand, «most investors remain interested in ongoing negotiations», which has led CBRE to accelerate processes and closing operations, expecting that the country returns to normal circulation in the short-medium term.
Nevertheless, Cristina Arouca admits that travel restrictions «have a significant impact on the transaction processes and closing of deals», since the majority of investors who are currently betting on Portugal are foreign (88% in 2019). This scenario forces the postponement of properties’ visits and the extension of due diligence processes.
On the future of Portuguese real estate, the Head of Research at CBRE Portugal has no doubts: « the longer the uncertainty remains in the market, the more significant the impact will be».