Real estate recovered a “very interesting dynamic” starting in June

Real estate recovered a “very interesting dynamic” starting in June

These words are from Francisco Horta e Costa, Managing Director at CBRE Portugal who further informed that investment in Portugal during the third quarter should reach a total 700 million euro, a number «rather inflated by the Lagoas Park transaction for more than 400 million euro».

CBRE’s forecast points towards the «conclusion of some large transactions throughout the second half of the year», which will contribute for the real estate market to close the year with a total 2.500 million euro «robust» investment and with the «most likely to be third highest annual investment registered in Portugal».

"The Property Handbook 2020" follows investors’ interest

Right now, «there is high liquidity on the market, due to capital’s concentration on real estate and to very low-interest rates», explained Francisco Horta e Costa. And these are the factors that may boost investment in the country in the coming months. «Portugal remains under the radar of these investors», assumed CBRE’s Managing Director who believes the country keeps offering «very attractive returns». 

And it is in order to support investors during this new cycle that CBRE and Vieira de Almeida (VdA) joined together this Friday to launch the new edition of the new real estate investment guide “The Property Handbook 2020”, an edition 100% online which «may contribute to expanding the knowledge base, in terms of deciding where to invest», at a time when the «market players are, generally speaking, optimistic about a quick recovery of the pre-crisis indicators», argued Miguel Marques dos Santos, real estate partner at VdA.

This is the fifth edition of "The Property Handbook", which first appeared during the financial crisis, in 2012, when it was harder to convince investors of the Portuguese market’s potential. «We are living times of uncertainty very different from the previous crisis», guaranteed VdA’s partner. «This data can better inform the market, especially now», he added.

For now, the type of investors who look towards Portugal remains the same. «We didn’t notice any difference in terms of the investors’ profiles», revealed Francisco Horta e Costa who gave as an example the «typical German low-risk core fund. And it is a good sign that they remain interested in Portugal». Miguel Marques dos Santos assumed that «we thought we would have a lot more vulture and core investors in September, both in terms of the investment market and in terms of development». But this type of investors «are more encouraged to make them [transactions] now».

The presence of players who «are more alert concerning opportunities» and «more willing to assume the risk» may generate, according to Francisco Horta e Costa, a «sense that there will be some sort of price adjustment, especially within the more impacted segments», as is the case of hotels. Nevertheless, he looks at the current scenario with optimism: «the good news is that they’re all here».

Uncertainty remains

After 7 months of adaptation to the pandemic storm, this market remains under the shadow of uncertainty. But there are signals which indicate the sector’s future.

Cristina Arouca, Director of Research at CBRE, remarked that we are still «living under heavy uncertainty, but it has become clear that Covid-19 accelerated some trends which were already being felt in the last few years, especially the growth of remote work and e-commerce».

Concerning the future of the office segment, Francisco Horta e Costa believes that we now «started reducing the uncertainty about the way the market will react towards remote work. The impact on the office market is currently relatively small», he revealed. And he further added that «there is a lot of interest in the office market and on logistic products, due to e-commerce's growth prospects».

«The housing segment for investment income is an increasingly approached subject in our market, the same as with other European markets. There are many projects being developed and many investors who want to buy with a long-term strategy in mind, with assumed low risks and low returns, it is a more defensive and more stable segment», revealed the consultant’s representative.

But this is not the forecast for all segments, «there are question marks». «Mostly concerning shopping centres, but not so many hotels», believes Francisco Horta e Costa.

Despite the current «uncertainty during the second half of the process – because we don’t know how this will go in the coming months-», VdA’s partner believes that «we are perhaps halfway through finding the solution to the problem, and we can say it didn’t go as bad», as we expected in March.

Governments have played an important role in drawing a course for the future. «The fact that Governments are guaranteeing that the measures which were implemented will last longer provides more optimism. It makes it more likely for the market to work normally when those measures are lifted», concluded Miguel Marques dos Santos.

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