'The EU New Green Deal and other legal changes in 2022: Do’s & Don’ts in future Real Estate Investments', was the moto during the session organised by Abreu Advogados on the second day of the Portugal Real Estate Summit.
As explained by Tiago Mendonça de Castro, partner in charge of co-ordinating real estate law practice at Abreu Advogados, the European Green Deal is milestone that stands as a point of no return for common European policy which will have a significant impact on the lives of all who live, work and do business in Europe. By advocating the «European Union’s commitment to convert Europe into the first green continent», namely, climatically neutral and delaying global warming, «will bring new rules and a new legal framework in terms of climate», with direct implications over the real estate sector. The new growth strategy for the EU will also guide all the measures to be applied by the Portuguese Government in terms of its Plan for Recovery and Resilience, providing new opportunities and challenges to investors and real estate companies, with large investments in greener technology and solutions to assist in a sustainable transition and which will boost decarbonisation.
The fact is that, this change to reduce the environmental footprint created by real estate, is already being felt across the sector, as stated by the speakers during the debate. «Within the transnational world of commercial real estate, «Green» is a path with no turning back. The big multinational corporations will increasingly occupy and rent spaces which follow the ESG criteria; and, likewise, great institutional investors, such as pension funds, will only invest in real estate assets certified in terms of environmental sustainability», stated Pedro Seabra, partner at Explorer Investments. The available data already shows that the more sustainable buildings are the ones generating more added value to their owners. «A recent study from RICS concluded that greener buildings are sold at a profit of 20% and their rents offer returns of 8%», mentioned Pedro Silveira, Grupo SIL’s CEO.
«Taxes are always a challenge in Portugal»
Despite its significant impact, sustainability is not the only reason for the big legal changes coming in 2022 which will impact the sector. The changes to the current Golden Visa regime will, according to Rita Viana, partner at Abreu, «be one of the most challenging changes for real estate investment in Portugal».
Highlighting that «taxes are always a challenge in Portugal», the expert commented that the successive legal changes to urban rental have been one of the great deterrents to the development of a professional rental market in the country, «making it difficult to have large investments in the residential rental segment».