M7 Real Estate announced this Monday the (separate) sale of three assets in Lisbon and Évora, representing the M7 Portuguese Active Fund (M7 PRAF) for a total value of 12.2 million euros.
Among the assets is the Retail Park of Évora, with 6,000 square meters, which was sold to Europar, the Brazilian family office. M7's asset management strategy included obtaining city council approval to build an additional 2,000 square meters of store to accommodate the expansion of one of the resident retailers and the leasing of a vacant store. The asset is currently 100% occupied, with tenants such as AKI, Hôma or Feira dos Sofás.
In Lisbon, M7 also sold a 2,800 square meter building, currently occupied by «a market leader in the gym sector», to a Portuguese fund managed by Fundiestamo. M7 agreed during the pandemic a set of incentives and discounts with the tenant in exchange for a longer contractual extension of 8 years.
Finally, a fraction of 251 square meters of fully occupied offices in the Arcis building, also in Lisbon, was sold to Fundiestamo. In the three operations, the M7 was accompanied by B.Prime.
In a statement, M7 highlights that, in addition to these three disposals, new lease terms were also agreed with a car parts and accessories distribution company for a last-mile space in Lisbon, with 4,400 square meters, also at PORAF, which will allow the fund to increase its income level by around 40%.
For Leonardo Peres, Managing Director in Portugal at M7 Real Estate, «the investment market in Portugal continues to present a very positive performance, despite the challenging scenario, with these three sales operations generating very attractive returns for our investors. This confidence is driven by the strong fundamentals of the national real estate sector, translating into a very robust performance projection, both in the real estate market and in the fund portfolio. This is also confirmed by the very strong level of transactions forecast for 2022, with emphasis on the fact that at the beginning of this year 2022 it is already possible to identify a volume of operations in progress and in different stages of negotiation, in excess of 2,000 million euros, already exceeding the total volume of investment verified in the year 2021».
For his part, João Salema Garção, Senior Asset Manager at M7 Real Estate, adds that «our knowledge of the local market has been fundamental in generating value in active months and guaranteeing the execution of these sales on behalf of the Fund. It is important to add, the particular interest in the Retail Parks segment, both by occupiers and by investors, due to the growth of e-commerce in Portugal and the flexibility that this asset class allows, including from an alternative use perspective».
M7 PORAF was created in 2018, focused on value-add investments in regions considered “key” in the Portuguese market. The fund is fully invested, and includes a portfolio of offices, logistics, light-industrial and retail parks, in a total of 176,000 square meters, spread over the Greater Lisbon and Greater Porto areas.