The Portuguese Real Estate Market in April

The market remained at a virtual standstill last month in Portugal, as it has in the rest of Europe and all over the world. Governments were focused on aiding their constituents and preventing a rash of permanent business closures.

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Homes in Porto.

An interesting corollary to the pandemic crisis has been its effect on Airbnb and other such platforms. Occupancy in most such homes has fallen to zero in a matter of weeks.  Anecdotal reports say that an increasing number of the owners of short-term tourist rental properties are once again considering long-term lets as a way to protect themselves from future lockdowns and the accompanying total loss of income.  European policymakers are eager to encourage such a move, thereby relieving some of the housing price pressures that stem from Airbnb’s success.

The fall in pollution in Europe’s main urban centres and the success many professionals have had with online meetings on Zoom or Skype are also leading talks of permanently decreasing the use of office space and potentially moving towards the greater use of flexible offices. Such a move though, maybe a little too late to save WeWork from its excesses. Many governments are looking at the possibility of permanently reducing vehicular traffic in city centres, while potentially converting some of the freed-up office space into residential units.

In more local news, residential price growth held in the first quarter of 2020. According to a report by Imovirtual, housing sales prices rose by 5% while rental prices increased by 3%.

In the commercial sector, the first three months of this year saw €1.5 billion in real estate transactions, the second-best quarter ever, according to a report by CBRE. Between January and March, there were 17 transactions involving 42 properties. The highest result for one quarter came at the end of last year (€1.7 billion).

Hospitality

Palminvest, which is partially controlled by Yahoo!’s former COO, Henrique de Castro, has acquired the Bernardino Gomes Group for approximately three hundred million euros. The deal, which was finalised in February but only reported last month, had been under negotiation for over a year. The Bernardino Gomes Group, which was founded in the 1970s, controls a portfolio of properties that includes more than 2,000 flats, 100 villas, 500 stores, 20 offices, 15 warehouses, twelve hotels and more than 60 plots of land. The most valuable asset, however, is the Hotéis Real (Royal Hotels) hotel chain. Hotéis Real has a total of around 1,500 rooms, primarily in Lisbon and the Algarve. These include the Grande Real Villa Itália Hotel & Spa (Cascais), Hotel Real Oeiras, Hotel Real Palácio (Lisbon), Hotel Real Parque (Lisbon), Real Residência Apartamentos Turísticos (Lisbon), Maxime Hotel Lisbon, Grande Real Santa Eulália Resort & Hotel Spa (Albufeira), Real Bellavista Hotel & Spa (Albufeira), Real Marina Hotel & Spa and Real Marina Residence (both in Olhão). The buyer plans to invest more than €20 million in the portfolio, specifically the Hotéis Real chain, which has been hard hit by the Covid-19 pandemic.

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