Investment exceeds €1.3 billion during pandemic in Portugal

The opening of a store of the luxury brand Dolce & Gabanna, in the first week of May, in the middle of Avenida da Liberdade, in the center of Lisbon, was just another sign. The country was beginning to untune and businesswoman Paula Amorim, the promoter of that commercial investment, showed that the real estate (and fashion) businesses did not stop the pandemic.

Not only have they not stopped - which is an example of what Paula Amorim has underway in Comporta, with the French investor Claude Berda - but, since the declaration of the state of pandemic until the end of this week, real estate projects were invested or launched in Portugal worth more than €1300 million.

ALMOST €3 BILLION 'ON THE MOVE'

But if we add to this value the €400 million that Bondstone maintains, despite the crisis, as an investment target in Portugal, plus €430 million of assets that Novo Banco intends to put on the market, we are already talking about a sum in excess of €2.1 billion.

On the other hand, one of the largest real estate agents present in the national market, RE/MAX, recorded a turnover of around €827 million between March 19 and May 31.

The icing on the cake came with a recent study - two weeks ago - by consultancy Cushman & Wakefield, which gives an account of real estate investment intentions in Portugal by 53 major market operators of around €7 billion over the coming months. The most desirable areas are logistics, housing, and the health segment (hospitals and reception buildings for the elderly).

"In fact, all this only demonstrates one thing: it is that the real estate sector was one of the few that remained active during the pandemic, especially in investment. He kept thousands of jobs — in construction alone are around 600,000", stresses, with undisguised pride, Hugo Santos Ferreira, executive vice president of the Portuguese Association of Real Estate Developers and Investors (APPII).

It stresses that since March there has been virtually no day when it has not received a call from foreign investors wanting to know how the market was in Portugal, because the intention was (and is) to channel capital into real estate.

PORTUGUESE MARKET AMONG THE MOST ATTRACTIVE

In fact, in financial markets in general there is a certain excess of liquidity and, of course, demand is headed where there are more opportunities and preferably with good rates of return. Now, as Santos Ferreira explains, the national real estate market is still one of the most attractive in Europe and, on the other hand, Portugal's behavior in the way it dealt with the pandemic ended up generating a wave of empathy with the owners of the big capital.

To the point that the one that is considered one of the largest, if not the most important, French real estate developer, especially in the residential sector – Nexity – created a branch in Portugal precisely while the state of emergency was in force. It is promoting investments in the Lisbon and Porto areas for a total of €70 million.

But the record holder of investments announced in the pandemic is Vic Properties, which wants to invest €450 million in the Pinheirinho Estate, near Melides, on the Alentejo coast. On the approximately 200 hectares of that estate will be built a hotel, two aparthotels, villas, and a golf course. This real estate group is also developing a housing project in Bra?o de Prata, Lisbon, signed by the renowned Italian architect Renzo Piano.

From France comes also a mega investment of €280 million in a housing complex for the middle / upper and upper classes in Alto da Boa Viagem, in the municipality of Oeiras, between the National Stadium and the City of Football. The promotion of this project oversees Vanguard, which belongs to the French millionaire Claude Berda (present at Comporta and in several luxury projects in the city of Lisbon and in the Algarve). Berda is, moreover, the largest real estate investor of today in brazil.

In third place on the podium of investments launched during the state of emergency also highlighted the Swiss capital company Mexto, which in the early days of May communicated a set of projects worth €114 million.

Interestingly, Sonae and the Spanish bank Bankinter teamed up to launch a few days ago the first SIGI - an investment and real estate management company - on the Lisbon Stock Exchange. These entities are mainly dedicated to investment in housing for the rental market. Nor did the pandemic scare those two brands to debut in the domestic market with Olympus Real Estate Portugal, "which is still another sign of great confidence in our country", stresses Hugo Santos Ferreira, appii.

The pandemic did not scare Sonae and Bankinter, which formed the first SIGI (Investment and Real Estate Management Company) listed on the Stock Exchange

He is keen to point out that since the beginning of the pandemic the sector has been cautiously optimistic. "In fact, this sector showed that it was very well prepared for a crisis - although no one knew what was coming - because most companies secured their 'boxes' and their 'treasuries', which eventually allowed many agents to go about two months without billing."

Optimism even dated that real estate is prepared to be "again" the start-up of the economy at this stage of pandemic slowdown. Again, according to him, on the way out of the financial crisis, from 2012, it was also via real estate - with the granting of gold visas - that the investment returned in force to Portugal. More than €5 billion was raised abroad through this modality.

SECTOR ALREADY MOVES €30 BILLION PER YEAR

The Vice-President of APPII helps up more figures to support the importance of the sector and ensures that it moves close to €30 billion a year, equivalent to 15% of gross domestic product. It also admits that real estate is growing 20% per year, both in investment volume and in number of transactions.

The association that brings together the main investors in the sector does not yet have consolidated figures for the first half of this year, being certain, however, that there was a significant drop in real estate sales, but not so much in the promotion of new projects.

Source: Jornal Expresso 4-7-20